EXHIBIT 4.1
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ASSET BACKED FUNDING CORPORATION,
Depositor
[________________________],
Servicer
and
WELLS FARGO BANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of [__________] 1, 20
ABFC 20 -[__] Trust
ABFC Asset-Backed Certificates, Series 20 -[___]
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms.................................................4
Section 1.02
Accounting...................................................52
Section 1.03 Rights of the NIMS
Insurer...................................52
Section 1.04 Fiscal
Year..................................................52
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage
Loans.................................52
Section 2.02 Acceptance by
Trustee........................................54
Section 2.03 Repurchase or
Substitution of Mortgage Loans by the
Originator or the Seller...................................55
Section 2.04
[Reserved]...................................................59
Section 2.05 Representations,
Warranties and Covenants of the Servicer....59
Section 2.06 Representations and
Warranties of the Depositor..............61
Section 2.07 Issuance of
Certificates and the Uncertificated Regular
Interests............................63
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as
Servicer...................................63
Section 3.02 Collection of Mortgage
Loan Payments..........................65
Section 3.03 Realization Upon
Defaulted Mortgage Loans.....................66
Section 3.04 Collection Account,
Distribution Account and Reserve
Accounts....................................................67
Section 3.05 Permitted Withdrawals
From the Collection Account.............71
Section 3.06 Establishment of
Escrow Accounts; Deposits in
Escrow Accounts.............................................72
Section 3.07 Permitted Withdrawals
From Escrow Account.....................73
Section 3.08 Payment of Taxes,
Insurance and Other Charges;
Collections Thereunder......................................74
Section 3.09 Transfer of
Accounts..........................................74
Section 3.10 Maintenance of Hazard
Insurance...............................74
Section 3.11 Maintenance of
Mortgage Impairment Insurance Policy...........75
Section 3.12 Fidelity Bond, Errors
and Omissions Insurance.................75
Section 3.13 Title, Management and
Disposition of REO Property.............76
Section 3.14 Due-on-Sale Clauses;
Assumption and Substitution Agreements...78
Section 3.15 Notification of
Adjustments...................................79
Section 3.16 Use of Subcontractors
and Subservicers........................79
Section 3.17 Trustee to Cooperate;
Release of Files........................80
Section 3.18 Servicing
Compensation........................................81
Section 3.19 Annual Statement as to
Compliance.............................81
Section 3.20 Annual Independent
Certified Public Accountants' Reports......82
Section 3.21 Access to Certain
Documentation and Information
Regarding the Mortgage Loans................................83
Section 3.22 Duties of Credit Risk
Manager.................................83
Section 3.23 Obligations of the
Servicer in Respect of Compensating
Interest....................................................84
Section 3.24 Obligations of the
Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.........................84
Section 3.25 Investment of Funds in
the Collection Account and
the Distribution Account....................................85
Section 3.26 Liability of Servicer;
Indemnification........................86
Section 3.27 Reports of Foreclosure
and Abandonment of
Mortgaged Properties........................................87
Section 3.28 Protection of
Assets..........................................87
Section 3.29 Limitation of
Liability of the Credit Risk Manager............88
Section 3.30 No Personal
Solicitation......................................88
Section 3.31 Periodic
Filings..............................................88
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest
Distributions........................................94
Section 4.02 Distributions of
Principal and Monthly Excess Cashflow
Amounts.....................................................95
Section 4.03 Allocation of
Losses.........................................100
Section 4.04 Method of
Distribution.......................................100
Section 4.05 Distributions on
Book-Entry Certificates.....................100
Section 4.06
Statements...................................................101
Section 4.07 Remittance Reports;
Advances.................................105
Section 4.08 REMIC
Distributions..........................................106
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates.............................................110
Section 5.02 Registration of
Transfer and Exchange of Certificates........111
Section 5.03 Mutilated, Destroyed,
Lost or Stolen Certificates............116
Section 5.04 Persons Deemed
Owners........................................116
Section 5.05 Appointment of Paying
Agent..................................116
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the
Servicer and the Depositor..................117
Section 6.02 Merger or
Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor..............117
Section 6.03 Limitation on
Liability of the Servicer and Others...........117
Section 6.04 Servicer Not to
Resign.......................................118
Section 6.05 Delegation of
Duties.........................................119
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of
Termination...............................121
Section 7.02 Trustee to Act;
Appointment of Successor.....................123
Section 7.03 Waiver of
Defaults...........................................124
Section 7.04 Notification to
Certificateholders...........................124
Section 7.05 Survivability of
Servicer Liabilities........................125
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of
Trustee............................................125
Section 8.02 Certain Matters
Affecting the Trustee........................127
Section 8.03 Trustee Not Liable for
Certificates or Mortgage Loans........128
Section 8.04 Trustee May Own
Certificates.................................129
Section 8.05 Trustee Fees and
Expenses....................................129
Section 8.06 Eligibility
Requirements for Trustee.........................129
Section 8.07 Resignation or Removal
of Trustee............................130
Section 8.08 Successor
Trustee............................................130
Section 8.09 Merger or
Consolidation of Trustee...........................131
Section 8.10 Appointment of
Co-Trustee or Separate Trustee................131
Section 8.11 Limitation of
Liability......................................133
Section 8.12 Trustee May Enforce
Claims Without Possession of
Certificates...............................................133
Section 8.13 Suits for
Enforcement........................................133
Section 8.14 Waiver of Bond
Requirement...................................134
Section 8.15 Waiver of Inventory,
Accounting and Appraisal Requirement....134
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC
Administration.........................................134
Section 9.02 Prohibited
Transactions and Activities.......................136
Section 9.03 Indemnification with
Respect to Certain Taxes and Loss of
REMIC Status...............................................137
Section 9.04 REO
Property.................................................137
Section 9.05 Grantor Trust
Administration.................................138
ARTICLE X
TERMINATION
Section 10.01
Termination..................................................138
Section 10.02
Additional Termination
Requirements..........................140
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment....................................................141
Section 11.02
Recordation of Agreement;
Counterparts.......................142
Section 11.03
Limitation on Rights of
Certificateholders...................142
Section 11.04
Governing Law;
Jurisdiction..................................143
Section 11.05
Notices......................................................144
Section 11.06
Severability of
Provisions...................................144
Section 11.07
Article and Section
References...............................144
Section 11.08
Notice to the Rating Agencies and the NIMS
Insurer...........144
Section 11.09
Further
Assurances...........................................145
Section 11.10
Third Party
Beneficiary......................................145
Section 11.11
Acts of
Certificateholders...................................146
Section 11.12
Regulation AB Compliance; Intent of
Parties; Reasonableness....................................146
<PAGE>
EXHIBITS:
Exhibit A-1 Form
of Class A-1 Certificates
Exhibit A-2 Form
of Class A-2 Certificates
Exhibit A-3 Form
of Class A-3 Certificates
Exhibit A-4 Form
of Class A-4 Certificates
Exhibit B-1
Form of Class M-1
Certificates
Exhibit B-2 Form
of Class M-2 Certificates
Exhibit B-3 Form
of Class M-3 Certificates
Exhibit B-4 Form
of Class M-4 Certificates
Exhibit B-5 Form
of Class M-5 Certificates
Exhibit B-6 Form
of Class M-6 Certificates
Exhibit B-7 Form
of Class M-7 Certificates
Exhibit C-1 Form
of Class CE Certificates
Exhibit C-2 Form
of Class P Certificates
Exhibit C-3 Form
of Class R Certificates
Exhibit C-4 Form
of Class R-X Certificates
Exhibit D-1
Addresses for Requesting Group 1 Mortgage Loan Schedule
Exhibit D-2
Addresses for Requesting Group 2 Mortgage Loan Schedule
Exhibit E
Form of Request for Release
Exhibit F-1 Form
of Trustee's Initial Certification
Exhibit F-2 Form
of Trustee's Final Certification
Exhibit F-3 Form
of Receipt of Mortgage Note
Exhibit G
Mortgage Loan Purchase Agreement
Exhibit H
Form of Lost Note Affidavit
Exhibit I
Form of ERISA Representation
Exhibit J-1 Form
of Investment Letter (Non-Rule 144A)
Exhibit J-2 Form
of Rule 144A Investment Letter
Exhibit K
Form of [Class R][Class R-X] Certificate Transfer Affidavit
Exhibit L
Form of Transferor Certificate
Exhibit M
Monthly Information Provided by Servicer
Exhibit N
Yield Maintenance Agreements
Exhibit O
Form of Certification
Exhibit P-1 Form
of Certification of the Trustee to be Provided to
Depositor
Exhibit P-2 Form
of Certification of the Servicer to be Provided to
Depositor
Exhibit Q
Relevant Servicing Criteria
Exhibit R-1
Additional Form 10-D Information
Exhibit R-2
Additional Form 10-K Information
Exhibit R-3 Form
8-K Information
<PAGE>
ASSET BACKED FUNDING CORPORATION, as depositor (the
"Depositor"),
[________________________], as servicer (the "Servicer"), and WELLS
FARGO BANK,
N.A., as trustee (the "Trustee") are entering into this Pooling and
Servicing
Agreement, dated as of [__________] 1, 20 (the "Agreement").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in
multiple Classes,
which in the aggregate will evidence the entire beneficial
ownership interest in
the Trust Fund created hereunder. The Certificates will consist of
fifteen
Classes of Certificates, designated as (i) the Class A-1, Class
A-2, Class A-3
and Class A-4 Certificates, (ii) the Class M-1, Class M-2, Class
M-3, Class M-4,
Class M-5, Class M-6 and Class M-7 Certificates, (iii) the Class
CE
Certificates, (iv) the Class P Certificates and (v) the Class R and
Class R-X
Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets subject to this Agreement (but exclusive of the
Yield Maintenance
Agreements, the Reserve Accounts, the Cap Carryover Amounts, the
Prepayment
Charges, the Originator Prepayment Charge Payment Amounts and the
Servicer
Prepayment Charge Payment Amounts) as a real estate investment
conduit (a
"REMIC") for federal income tax purposes, and such segregated pool
of assets
will be designated as "REMIC 1." The Class R-1 Interest will
represent the sole
class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions
under federal income tax law. The following table irrevocably sets
forth the
designation, the Uncertificated REMIC 1 Pass-Through Rate, the
initial
Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury
Regulations Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for
each of the REMIC 1 Regular Interests. None of the REMIC 1 Regular
Interests
will be certificated.
<PAGE>
Uncertificated
Initial
REMIC Pass-Through Uncertificated
Latest Possible
Designation
Rate
Balance
Maturity Date
LT1AA
Variable(2)
[______________]
LT1A1
Variable(2)
[______________]
LT1A2
Variable(2)
[______________]
LT1A3
Variable(2)
[______________]
LT1A4
Variable(2)
[______________]
LT1M1
Variable(2)
[______________]
LT1M2
Variable(2)
[______________]
LT1M3
Variable(2)
[______________]
LT1M4
Variable(2)
[______________]
LT1M5
Variable(2)
[______________]
LT1M6
Variable(2)
[______________]
LT1M7
Variable(2)
[______________]
LT1ZZ
Variable(2)
[______________]
LT1SUB
Variable(2)
[______________]
LT1GRP
Variable(2)
[______________]
LT2SUB
Variable(2)
[______________]
LT2GRP
Variable(2)
[______________]
LT1XX
Variable(2)
[______________]
(1) Solely for
purposes of Treasury Regulations Section
1.860G-1(a)(4)(iii), the Distribution Date in the month following
the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
1
Regular
Interest.
(2) Calculated
in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the REMIC 1 Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC 2." The Class R-2 Interest represents the sole
class of
"residual interests" in REMIC 2 for purposes of the REMIC
Provisions.
The following table sets forth (or describes) the Class
designation,
Certificate Interest Rate and Original Class Certificate Principal
Balance for
each Class of Certificates comprising the interests in the Trust
Fund created
hereunder:
<PAGE>
Original Class
Certificate
Certificate
Assumed Final
Class
Principal Balance Interest Rate
Maturity Dates
A-1
(1)
[______________]
A-2
(2)
[______________]
A-3
(3)
[______________]
A-4
(4)
[______________]
M-1
(5)
[______________]
M-2
(6)
[______________]
M-3
(7)
[______________]
M-4
(8)
[______________]
M-5
(9)
[______________]
M-6
(10)
[______________]
M-7
(11)
[______________]
CE
(12)
(12)
N/A
P
N/A
N/A
N/A
R
N/A
N/A
N/A
R-X
N/A
N/A
N/A
Total
$[_____________]
(1) Interest
will accrue on the Class A-1 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-1
Pass-Through Rate and (ii) the Group 1 Cap for such Distribution
Date.
(2) Interest
will accrue on the Class A-2 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-2
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution
Date.
(3) Interest
will accrue on the Class A-3 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-3
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution
Date.
(4) Interest
will accrue on the Class A-4 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-4
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution
Date.
(5) Interest
will accrue on the Class M-1 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(6) Interest
will accrue on the Class M-2 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(7) Interest
will accrue on the Class M-3 Certificates during each Interest
Accrual Period
at a rate equal to the lesser of: (i) the Class M-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(8) Interest
will accrue on the Class M-4 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-4
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(9) Interest
will accrue on the Class M-5 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-5
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(10) Interest will
accrue on the Class M-6 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-6
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(11) Interest will
accrue on the Class M-7 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-7
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(12) Solely for REMIC
purposes, the Class CE Certificates will (i) have an
Original
Class Certificate Principal Balance equal to the Initial
Overcollateralization Amount and (ii) will bear interest on
their
Notional
Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement,
the
following words and phrases, unless the context otherwise requires,
shall have
the meanings specified in this Article. Interest on all Classes of
REMIC 1
Regular Interests will be calculated on the basis of a 360-day year
consisting
of twelve 30-day months. Interest on all Regular Certificates will
be calculated
on the basis of the actual number of days in the related Interest
Accrual Period
and a 360-day year.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each Mortgage Loan for which the
Mortgagor has
filed for bankruptcy after the Closing Date) with respect to which
any portion
of a Monthly Payment is, as of the last day of the prior Collection
Period, two
months or more past due and each Mortgage Loan relating to an REO
Property.
"Account": Any of the Collection Account, the Distribution
Account,
the Class A-1 Reserve Account, the Group 2-A Reserve Account, the
Class M
Reserve Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each
Distribution
Date and Class of Certificates, an amount equal to the interest
accrued at the
Certificate Interest Rate described opposite such Class in the
table in the
Preliminary Statement during the related Interest Accrual Period on
the
Certificate Principal Balance of such Class of Certificates,
reduced by such
Class' Interest Percentage of Relief Act Interest Shortfalls for
such
Distribution Date.
"Additional Form 10-D Information": As defined in Section
3.31(b).
"Additional Form 10-K Disclosure": As defined in Section
3.31(c).
"Additional Servicer": As defined in Section 3.16.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate
at
which interest accrues that adjusts based on the Index plus a
related Gross
Margin, as set forth and subject to the limitations in the related
Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate of
an
Adjustable-Rate Mortgage Loan changes pursuant to the related
Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each
Adjustable-Rate
Mortgage Loan is set forth in the Mortgage Loan Schedules.
"Advance": As to any Mortgage Loan, any advance made by the
Servicer
in respect of any Distribution Date pursuant to Section 4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such
Person. For
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether through
ownership of
voting securities, by contract or otherwise and "controlling" and
"controlled"
shall have meanings correlative to the foregoing.
"Aggregate Overcollateralization Release Amount": With respect
to
any Distribution Date, the lesser of (i) the Principal Remittance
Amount and
(ii) the Overcollateralization Release Amount.
"Agreement": This Pooling and Servicing Agreement and all
amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable
thereto.
"Applied Realized Loss Amount": With respect to each
Distribution
Date, the excess, if any, of the aggregate of (a) the Certificate
Principal
Balances of the Certificates (after taking into account the
distribution of the
Principal Distribution Amount on such Distribution Date and any
increase in any
Certificate Principal Balance as a result of Subsequent Recoveries)
over (b) the
Pool Balance as of the end of the related Collection Period after
giving effect
to Principal Prepayments in the related Prepayment Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient
under the laws of
the jurisdiction wherein the related Mortgaged Property is located
to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates,
the
date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal
to
the excess of (i) the sum of (a) the aggregate of the Monthly
Payments due
during the related Collection Period and received on or prior to
the related
Determination Date by the Servicer, (b) Liquidation Proceeds,
Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments,
Substitution Adjustment
Amounts, the Purchase Price for any repurchased Mortgage Loan, the
Termination
Price with respect to the termination of the Trust pursuant to
Section 10.01
hereof and other unscheduled recoveries of principal and interest
(excluding
Prepayment Charges, Originator Prepayment Charge Payment Amounts,
Servicer
Prepayment Charge Payment Amounts and Prepayment Interest Excess)
in respect of
the Mortgage Loans during the related Prepayment Period, (c) the
aggregate of
any amounts received in respect of an REO Property deposited in the
Collection
Account for such Distribution Date, (d) any Compensating Interest
for such
Distribution Date, (e) the aggregate of any Advances made by the
Servicer for
such Distribution Date and (f) any Reimbursement Amount or
Subsequent Recovery
deposited into the Collection Account during the related Prepayment
Period over
(ii) the sum of (a) amounts reimbursable or payable to the Servicer
pursuant to
Sections 3.05 or 6.03, (b) amounts reimbursable or payable to the
Trustee
pursuant to Section 8.05 (other than Trustee Fees) or Section
9.01(c), (c)
Stayed Funds, (d) the Servicing Fee and (e) amounts deposited in
the Collection
Account or the Distribution Account, as the case may be, in
error.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Book-Entry Certificates": Any of the Certificates that shall
be
registered in the name of the Depository or its nominee, the
ownership of which
is reflected on the books of the Depository or on the books of a
Person
maintaining an account with the Depository (directly, as a
"Depository
Participant," or indirectly, as an indirect participant in
accordance with the
rules of the Depository and as described in Section 5.02 hereof).
On the Closing
Date, the Class A-1, Class A-2, Class A-3, Class A-4, Class M-1,
Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates shall be
Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day
on
which banking institutions in the State of North Carolina, the
State of New
York, the State of Minnesota, each State in which the servicing
offices of the
Servicer are located or each State in which the Corporate Trust
Office of the
Trustee is located are authorized or obligated by law or executive
order to be
closed.
"Cap": Any of the Group 1 Cap, the Group 2 Cap or the Pool Cap.
"Cap Amount": With respect to each Distribution Date and each
Class
of Class M Certificates, the product of (i) the Class M Yield
Maintenance
Agreement Payment for such Distribution Date and (ii) a fraction,
the numerator
of which is the Certificate Principal Balance of such Class
immediately prior to
such Distribution Date and the denominator of which is the
aggregate Certificate
Principal Balance of the Class M Certificates immediately prior to
such
Distribution Date.
"Cap Carryover Amount": If on any Distribution Date, the
Accrued
Certificate Interest for any Offered Certificate and the Class M-7
Certificates
is based upon the related Cap, the excess of (i) the amount of
interest such
Certificate would have been entitled to receive on such
Distribution Date based
on the related Pass-Through Rate, over (ii) the amount of interest
such
Certificate received on such Distribution Date based on such
related Cap,
together with the unpaid portion of any such excess from prior
Distribution
Dates (and interest accrued thereon at the then applicable
Pass-Through Rate on
such Certificate).
"Certificate": Any Regular Certificate, Class P Certificate, Class
R
Certificate or Class R-X Certificate.
"Certificate Custodian": Initially, Wells Fargo Bank, N.A.;
thereafter any other Certificate Custodian acceptable to the
Depository and
selected by the Trustee.
"Certificate Interest Rate": With respect to each Distribution
Date
and Class of Certificates, the per annum rate described in the
table in the
Preliminary Statement during the related Interest Accrual Period on
the
Certificate Principal Balance.
"Certificate Owner": With respect to each Book-Entry
Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class CE, Class P, Class R and Class
R-X
Certificates) and any Distribution Date, the Original Class
Certificate
Principal Balance (a) reduced by the sum of (i) all amounts
actually distributed
in respect of principal of such Class on all prior Distribution
Dates and (ii)
Applied Realized Loss Amounts allocated thereto for previous
Distribution Dates
and (b) increased by any Subsequent Recoveries allocated to such
Class for
previous Distribution Dates. The Class CE, Class P, Class R and
Class R-X
Certificates do not have a Certificate Principal Balance. With
respect to any
Certificate (other than a Class CE, Class P, Class R or Class R-X
Certificate)
of a Class and any Distribution Date, the portion of the
Certificate Principal
Balance of such Class represented by such Certificate equal to the
product of
the Percentage Interest evidenced by such Certificate and the
Certificate
Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The
register
maintained and registrar appointed pursuant to Section 5.02
hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that
a
Disqualified Organization or non-U.S. Person shall not be a Holder
of the Class
R or Class R-X Certificates for any purpose hereof.
"Certification": As defined in Section 3.31(c) hereof.
"Class": Collectively, Certificates or REMIC Regular Interests
which
have the same priority of payment and bear the same class
designation and the
form of which is identical except for variation in the Percentage
Interest
evidenced thereby.
"Class A-1 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class A-1 Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to One-Month LIBOR as of the related LIBOR
Determination Date,
plus the Class A-1 Certificate Margin.
"Class A-1 Reserve Account": The trust account created and
maintained by the Trustee pursuant to Section 3.04(g) which shall
be entitled
"Class A-1 Reserve Account, Wells Fargo Bank, N.A., as Trustee, in
trust for
registered Holders of the Class A-1 Certificates of the ABFC 20
-[___] Trust,
ABFC Asset-Backed Certificates, Series 20 -[___]" and which must be
an Eligible
Account. Amounts on deposit in the Class A-1 Reserve Account shall
not be
invested. The Class A-1 Reserve Account shall not be an asset of
any REMIC
formed under this Agreement.
"Class A-1 Yield Maintenance Agreement": The yield maintenance
agreement between the Trustee, on behalf of the Trust, and the
Class A-1 Yield
Maintenance Agreement Provider attached hereto as Exhibit N. The
Class A-1 Yield
Maintenance Agreement shall not be an asset of any REMIC formed
under this
Agreement.
"Class A-1 Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution Date in [_______], the
amount equal
to the product of (a) the excess of the lesser of (i) One-Month
LIBOR and (ii)
the applicable ceiling rate for such Distribution Date over the
strike rate for
such Distribution Date, in each case as set forth on the schedule
attached to
the confirmation to the Class A-1 Yield Maintenance Agreement, (b)
the product
of the cap notional amount and the scale factor for such
Distribution Date, both
as set forth on the schedule attached to the confirmation to the
Class A-1 Yield
Maintenance Agreement and (c) a fraction, the numerator of which is
the actual
number of days elapsed since the previous Distribution Date (or the
Closing
Date, in the case of the first Distribution Date) to but excluding
the current
Distribution Date and the denominator of which is 360.
"Class A-1 Yield Maintenance Agreement Provider":
[_____________]
and any successor thereto.
"Class A-2 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class A-2 Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to One-Month LIBOR as of the related LIBOR
Determination Date,
plus the Class A-2 Certificate Margin.
"Class A-3 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class A-3 Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to One-Month LIBOR as of the related LIBOR
Determination Date,
plus the Class A-3 Certificate Margin.
"Class A-4 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class A-4 Pass-Through Rate": For each Distribution Date, a
rate
per annum equal to One-Month LIBOR as of the related LIBOR
Determination Date,
plus the Class A-4 Certificate Margin.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed
hereto as
Exhibits A-1, A-2, A-3 and A-4, executed by the Trustee on behalf
of the Trust
and authenticated and delivered by the Certificate Registrar,
representing the
right to distributions as set forth herein and therein.
"Class A Certificateholders": Collectively, the Holders of the
Class
A Certificates.
"Class CE Certificates": Any one of the Class CE Certificates
as
designated on the face thereof substantially in the form annexed
hereto as
Exhibit C-1, executed by the Trustee on behalf of the Trust and
authenticated
and delivered by the Certificate Registrar, representing the right
to
distributions as set forth herein and therein.
"Class CE Distributable Amount": With respect to any
Distribution
Date, the sum of (i) the interest accrued on such Class CE
Certificate at its
Pass-Through Rate calculated on its Notional Amount less the amount
(without
duplication) of Cap Carryover Amounts paid pursuant to Section
4.02(b)(xxiv),
(ii) any remaining Aggregate Overcollateralization Release Amounts,
(iii) the
aggregate of amounts remaining in the Reserve Accounts after the
distributions
in Section 3.04(g)(i)(A) through Section 3.04(g)(i)(E).
"Class CE Uncertificated Principal Balance": As of any date of
determination, the Initial Overcollateralization Amount minus the
sum of (i) any
Realized Losses allocated thereto and (ii) any amounts distributed
(or deemed
distributed) to the Class CE Certificates with respect thereto.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed
hereto as
Exhibit B-1, Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit B-5,
Exhibit B-6 and
Exhibit B-7, executed by the Trustee on behalf of the Trust and
authenticated
and delivered by the Certificate Registrar, representing the right
to
distributions as set forth herein and therein.
"Class M Certificateholders": Collectively, the Holders of the
Class
M Certificates.
"Class M Reserve Account": The trust account created and
maintained
by the Trustee pursuant to Section 3.04(g) which shall be entitled
"Class M
Reserve Account, Wells Fargo Bank, N.A., as Trustee, in trust for
registered
Holders of the Class M Certificates of the ABFC 20 -[___] Trust,
ABFC
Asset-Backed Certificates, Series 20 -[___]" and which must be an
Eligible
Account. Amounts on deposit in the Class M Reserve Account shall
not be
invested. The Class M Reserve Account shall not be an asset of any
REMIC formed
under this Agreement.
"Class M Yield Maintenance Agreement": The yield maintenance
agreement between the Trustee, on behalf of the Trust, and the
Class M Yield
Maintenance Agreement Provider attached hereto as Exhibit N. The
Class M Yield
Maintenance Agreement shall not be an asset of any REMIC formed
under this
Agreement.
"Class M Yield Maintenance Agreement Payment": On each
Distribution
Date through the Distribution Date in [________], the amount equal
to the
product of (a) the excess of the lesser of (i) One-Month LIBOR and
(ii) the
applicable ceiling rate for such Distribution Date over the strike
rate for such
Distribution Date, in each case as set forth on the schedule
attached to the
confirmation to the Class M Yield Maintenance Agreement, (b) the
product of the
cap notional amount and the scale factor for such Distribution
Date, both as set
forth on the schedule attached to the confirmation to the Class M
Yield
Maintenance Agreement and (c) a fraction, the numerator of which is
the actual
number of days elapsed since the previous Distribution Date (or the
Closing
Date, in the case of the first Distribution Date) to but excluding
the current
Distribution Date and the denominator of which is 360.
"Class M Yield Maintenance Agreement Provider": [______________]
and
any successor thereto.
"Class M-1 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date,
One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class
M-1 Certificate
Margin.
"Class M-1 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the Certificate Principal
Balances of
the Class A Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date) and (ii)
the
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i) [___]% and
(ii) the Pool Balance as of the last day of the related Collection
Period after
giving effect to Principal Prepayments in the related Prepayment
Period and (B)
the Pool Balance as of the last day of the related Collection
Period after
giving effect to Principal Prepayments in the related Prepayment
Period minus
the product of [___]% and the Cut-off Date Aggregate Principal
Balance.
"Class M-1 Realized Loss Amortization Amount": As to the Class
M-1
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof,
in each case
for such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date,
One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class
M-2 Certificate
Margin.
"Class M-2 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the Certificate Principal
Balances of
the Class A Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates (after taking into
account the
payment of the Class M-1 Principal Distribution Amount on such
Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the
product of (i) [___]% and (ii) the Pool Balance as of the last day
of the
related Collection Period after giving effect to Principal
Prepayments in the
related Prepayment Period and (B) the Pool Balance as of the last
day of the
related Collection Period after giving effect to Principal
Prepayments in the
related Prepayment Period minus the product of [___]% and the
Cut-off Date
Aggregate Principal Balance.
"Class M-2 Realized Loss Amortization Amount": As to the Class
M-2
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (vii)
hereof, in each
case for such Distribution Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date,
One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class
M-3 Certificate
Margin.
"Class M-3 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal
Balances of the Class A Certificates (after taking into account the
payment of
the Senior Principal Distribution Amount on such Distribution
Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after
taking into
account the payment of the Class M-1 Principal Distribution Amount
on such
Distribution Date), (iii) the Certificate Principal Balance of the
Class M-2
Certificates (after taking into account the payment of the Class
M-2 Principal
Distribution Amount on such Distribution Date), and (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
[___]% and (ii)
the Pool Balance as of the last day of the related Collection
Period after
giving effect to Principal Prepayments in the related Prepayment
Period and (B)
the Pool Balance as of the last day of the related Collection
Period after
giving effect to Principal Prepayments in the related Prepayment
Period minus
the product of [___]% and the Cut-off Date Aggregate Principal
Balance.
"Class M-3 Realized Loss Amortization Amount": As to the Class
M-3
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (x) hereof,
in each case
for such Distribution Date.
"Class M-4 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-4 Pass-Through Rate": For each Distribution Date,
One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class
M-4 Certificate
Margin.
"Class M-4 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal
Balances of the Class A Certificates (after taking into account the
payment of
the Senior Principal Distribution Amount on such Distribution
Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after
taking into
account the payment of the Class M-1 Principal Distribution Amount
on such
Distribution Date), (iii) the Certificate Principal Balance of the
Class M-2
Certificates (after taking into account the payment of the Class
M-2 Principal
Distribution Amount on such Distribution Date), (iv) the
Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the payment of
the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v)
the Certificate Principal Balance of the Class M-4 Certificates
immediately
prior to such Distribution Date over (y) the lesser of (A) the
product of (i)
[___]% and (ii) the Pool Balance as of the last day of the related
Collection
Period after giving effect to Principal Prepayments in the related
Prepayment
Period and (B) the Pool Balance as of the last day of the related
Collection
Period after giving effect to Principal Prepayments in the related
Prepayment
Period minus the product of [___]% and the Cut-off Date Aggregate
Principal
Balance.
"Class M-4 Realized Loss Amortization Amount": As to the Class
M-4
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiii)
hereof, in each
case for such Distribution Date.
"Class M-5 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-5 Pass-Through Rate": For each Distribution Date,
One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class
M-5 Certificate
Margin.
"Class M-5 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal
Balances of the Class A Certificates (after taking into account the
payment of
the Senior Principal Distribution Amount on such Distribution
Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after
taking into
account the payment of the Class M-1 Principal Distribution Amount
on such
Distribution Date), (iii) the Certificate Principal Balance of the
Class M-2
Certificates (after taking into account the payment of the Class
M-2 Principal
Distribution Amount on such Distribution Date), (iv) the
Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the payment of
the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into
account the payment of the Class M-4 Principal Distribution Amount
on such
Distribution Date) and (vi) the Certificate Principal Balance of
the Class M-5
Certificates immediately prior to such Distribution Date over (y)
the lesser of
(A) the product of (i) [___]% and (ii) the Pool Balance as of the
last day of
the related Collection Period after giving effect to Principal
Prepayments in
the related Prepayment Period and (B) the Pool Balance as of the
last day of the
related Collection Period after giving effect to Principal
Prepayments in the
related Prepayment Period minus the product of [___]% and the
Cut-off Date
Aggregate Principal Balance.
"Class M-5 Realized Loss Amortization Amount": As to the Class
M-5
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvi)
hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-6 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination
Date, plus
the Class M-6 Certificate Margin and (b) the Pool Maximum Rate
Cap.
"Class M-6 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal
Balances of the Class A Certificates (after taking into account the
payment of
the Senior Principal Distribution Amount on such Distribution
Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after
taking into
account the payment of the Class M-1 Principal Distribution Amount
on such
Distribution Date), (iii) the Certificate Principal Balance of the
Class M-2
Certificates (after taking into account the payment of the Class
M-2 Principal
Distribution Amount on such Distribution Date), (iv) the
Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the payment of
the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into
account the payment of the Class M-4 Principal Distribution Amount
on such
Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the
Certificate
Principal Balance of the Class M-6 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
[___]% and (ii)
the Pool Balance as of the last day of the related Collection
Period after
giving effect to Principal Prepayments in the related Prepayment
Period and (B)
the Pool Balance as of the last day of the related Collection
Period after
giving effect to Principal Prepayments in the related Prepayment
Period minus
the product of [___]% and the Cut-off Date Aggregate Principal
Balance.
"Class M-6 Realized Loss Amortization Amount": As to the Class
M-6
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (xix)
hereof, in each
case for such Distribution Date.
"Class M-7 Certificate Margin": For each Distribution Date (i) on
or
prior to the Optional Termination Date, [___]% per annum, and (ii)
following the
Optional Termination Date, [___]% per annum.
"Class M-7 Pass-Through Rate": For each Distribution Date,
One-Month
LIBOR as of the related LIBOR Determination Date, plus the Class
M-7 Certificate
Margin.
"Class M-7 Principal Distribution Amount": As of any
Distribution
Date on or after the Stepdown Date and as long as a Trigger Event
is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate
Principal
Balances of the Class A Certificates (after taking into account the
payment of
the Senior Principal Distribution Amount on such Distribution
Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after
taking into
account the payment of the Class M-1 Principal Distribution Amount
on such
Distribution Date), (iii) the Certificate Principal Balance of the
Class M-2
Certificates (after taking into account the payment of the Class
M-2 Principal
Distribution Amount on such Distribution Date), (iv) the
Certificate Principal
Balance of the Class M-3 Certificates (after taking into account
the payment of
the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after
taking into
account the payment of the Class M-4 Principal Distribution Amount
on such
Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal
Distribution Amount on such Distribution Date), (vii) the
Certificate Principal
Balance of the Class M-6 Certificates (after taking into account
the payment of
the Class M-6 Principal Distribution Amount on such Distribution
Date) and
(viii) the Certificate Principal Balance of the Class M-7
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the
product of (i) [___]% and (ii) the Pool Balance as of the last day
of the
related Collection Period after giving effect to Principal
Prepayments in the
related Prepayment Period and (B) the Pool Balance as of the last
day of the
related Collection Period after giving effect to Principal
Prepayments in the
related Prepayment Period minus the product of [___]% and the
Cut-off Date
Aggregate Principal Balance.
"Class M-7 Realized Loss Amortization Amount": As to the Class
M-7
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-7 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxii)
hereof, in each
case for such Distribution Date.
"Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed
hereto as
Exhibit C-2, executed by the Trustee on behalf of the Trust and
authenticated
and delivered by the Certificate Registrar, representing the right
to
distributions as set forth herein and therein.
"Class R Certificate": The Class R Certificate executed by the
Trustee on behalf of the Trust, and authenticated and delivered by
the
Certificate Registrar, substantially in the form annexed hereto as
Exhibit C-3
and evidencing the ownership of the Residual Interest in each of
REMIC 1 and
REMIC 2. The Class R Certificate represents the ownership of the
Class R-1
Interest and the Class R-2 Interest.
"Class R-1 Interest": The uncertificated residual interest in
REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in
REMIC
2.
"Class R-X Certificate": The Class R-X Certificate executed by
the
Trustee on behalf of the Trust, and authenticated and delivered by
the
Certificate Registrar, substantially in the form annexed hereto as
Exhibit C-4
and evidencing the ownership of the Residual Interest in REMIC
3.
"Closing Date": [__________].
"Code": The Internal Revenue Code of 1986, as it may be amended
from
time to time.
"Collection Account": The account or accounts created and
maintained
by the Servicer pursuant to Section 3.04(a), which shall be
entitled "Collection
Account, [_________________], as Servicer for the Trust under the
Pooling and
Servicing Agreement dated as of [___________] among Asset Backed
Funding
Corporation, as Depositor, [__________________], as Servicer, and
Wells Fargo
Bank, N.A., as Trustee, in trust for registered Holders of ABFC 20
-[___] Trust,
ABFC Asset-Backed Certificates, Series 20 -[___]," and which must
be an Eligible
Account.
"Collection Period": With respect to any Distribution Date, the
period from the second day of the calendar month preceding the
month in which
such Distribution Date occurs through the first day of the month in
which such
Distribution Date occurs.
"Combined
Loan-to-Value Ratio": For any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the sum of (i)
the
Principal Balance of the Mortgage Loan at origination and (ii) the
principal
balance of the senior mortgage loan, if any, on the date of
origination of the
Mortgage Loan and the denominator of which is the Value of the
related Mortgaged
Property.
"Commission": The United States Securities and Exchange
Commission.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect of
a
taking of a Mortgaged Property by exercise of the power of eminent
domain or
condemnation.
"Consulting Agreement": The Consulting Agreement, dated as of
[____________], between [__________], as Credit Risk Manager, and
the Depositor.
"Corporate Trust Office": The principal corporate trust office
of
the Trustee at which at any particular time its corporate trust
business in
connection with this Agreement shall be administered, which office
at the date
of the execution of this instrument is located at (i) for
certificate transfer
purposes, Wells Fargo Center, Sixth Street and Marquette Avenue,
Minneapolis,
Minnesota, 55479-0113, Attention: Client Manager-ABFC, Series 20
-[___] and (ii)
for all other purposes, 9062 Old Annapolis Road, Columbia, Maryland
21045,
Attention: Client Manager-ABFC, Series 20 -[___] or at such other
address as the
Trustee may designate from time to time by notice to the
Certificateholders, the
Depositor and the Servicer.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2,
the
following Classes shall be Corresponding Classes:
Corresponding REMIC 1 Classes
Corresponding REMIC 2 Classes
LT1A1
Class A-1 Certificates
LT1A2
Class A-2 Certificates
LT1A3
Class A-3 Certificates
LT1A4
Class A-4 Certificates
LT1M1
Class M-1 Certificates
LT1M2
Class M-2 Certificates
LT1M3
Class M-3 Certificates
LT1M4
Class M-4 Certificates
LT1M5
Class M-5 Certificates
LT1M6
Class M-6 Certificates
LT1M7
Class M-7 Certificates
"Credit Risk Manager": [_____________], a [________]
corporation.
"Credit Risk Manager Fee": The fee payable to the Credit Risk
Manager on each Distribution Date for its services as Credit Risk
Manager, in an
amount equal to the product of (i) one-twelfth of the Credit Risk
Manager Fee
Rate and (ii) the Pool Balance as of the opening of business on the
first day of
the related Collection Period.
"Credit Risk Manager Fee Rate": With respect to any
Distribution
Date, [___]% per annum.
"Credit Risk Management Agreement": The Credit Risk Management
Agreement between the Servicer and the Credit Risk Manager dated as
of
[____________].
"Cut-off Date": [_________] 1, 20 .
"Cut-off Date Aggregate Principal Balance": The aggregate of
the
Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan,
the unpaid principal balance thereof as of the Cut-off Date after
application of
funds received or advanced on or before such date (or as of the
applicable date
of substitution with respect to an Eligible Substitute Mortgage
Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan
by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code,
except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction
in an amount less than the then outstanding principal balance of
the Mortgage
Loan, which valuation results from a proceeding initiated under the
Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c)
hereof.
"Delinquent": Any Mortgage Loan with respect to which the
Monthly
Payment due on a Due Date is not made by the close of business on
the next
scheduled Due Date for such Mortgage Loan.
"Depositor": Asset Backed Funding Corporation, a Delaware
corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository
Trust
Company, whose nominee is Cede & Co., or any other organization
registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The
Depository
shall initially be the registered Holder of the Book-Entry
Certificates. The
Depository shall at all times be a "clearing corporation" as
defined in Section
8-102(3) of the Uniform Commercial Code of the State of New
York.
"Depository Participant": A broker, dealer, bank or other
financial
institution or other person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the
15th day of the calendar month in which such Distribution Date
occurs or, if
such 15th day is not a Business Day, the Business Day immediately
preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing
or rendering of services to the tenants thereof, the management or
operation of
such REO Property, the holding of such REO Property primarily for
sale to
customers, the performance of any construction work thereon or any
use of such
REO Property in a trade or business conducted by the Trust other
than through an
Independent Contractor; provided, however, that the Trustee (or the
Servicer
under this Agreement) shall not be considered to Directly Operate
an REO
Property solely because the Trustee (or the Servicer under this
Agreement)
establishes rental terms, chooses tenants, enters into or renews
leases, deals
with taxes and insurance, or makes decisions as to repairs or
capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization"
under
Section 860E of the Code, which as of the Closing Date is any of:
(i) the United
States, any state or political subdivision thereof, any possession
of the United
States, any foreign government, any international organization, or
any agency or
instrumentality of any of the foregoing, (ii) any organization
(other than a
cooperative described in Section 521 of the Code) which is exempt
from the tax
imposed by Chapter 1 of the Code unless such organization is
subject to the tax
imposed by Section 511 of the Code, (iii) any organization
described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated
by the Trustee
based upon an Opinion of Counsel provided by nationally recognized
counsel to
the Trustee that the holding of an ownership interest in the Class
R Certificate
or the Class R-X Certificate by such Person may cause the Trust
Fund or any
Person having an ownership interest in any Class of Certificates
(other than
such Person) to incur liability for any federal tax imposed under
the Code that
would not otherwise be imposed but for the transfer of an ownership
interest in
the Class R Certificate or the Class R-X Certificate to such
Person. A
corporation will not be treated as an instrumentality of the United
States or of
any state or political subdivision thereof if all of its activities
are subject
to tax and a majority of its board of directors is not selected by
a
governmental unit. The term "United States," "state" and
"international
organization" shall have the meanings set forth in Section 7701 of
the Code.
"Distribution Account": The trust account or accounts created
and
maintained by the Trustee pursuant to Section 3.04(b), which shall
be entitled
"Distribution Account, Wells Fargo Bank, N.A., as Trustee, in trust
for the
registered Holders of ABFC 20 -[___] Trust, ABFC Asset-Backed
Certificates,
Series 20 -[___]" and which must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if
such
25th day is not a Business Day, the Business Day immediately
following such 25th
day, commencing in [___________] 20 .
"Distribution Date Statement": As defined in Section 4.06(a)
hereof.
"Due Date": With respect to each Mortgage Loan and any
Distribution
Date, the day of the calendar month in which such Distribution Date
occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive
of any grace
period.
"Eligible Account": Any of (i) an account or accounts
maintained
with a federal or state chartered depository institution or trust
company the
short-term unsecured debt obligations of which (or, in the case of
a depository
institution or trust company that is the principal subsidiary of a
holding
company, the short-term unsecured debt obligations of such holding
company) are
rated "[___]" by [___], "[___]" by [____] and "[___]" by [____] (or
comparable
ratings if [___], [___] and [____] are not the Rating Agencies) by
each of the
Rating Agencies at the time any amounts are held on deposit
therein, (ii) an
account or accounts the deposits in which are fully insured by the
FDIC, (iii) a
trust account or accounts maintained with the trust department of a
federal or
state chartered depository institution, national banking
association or trust
company acting in its fiduciary capacity or (iv) an account
otherwise acceptable
to each Rating Agency without reduction or withdrawal of their then
current
ratings of the Certificates as evidenced by a letter from each
Rating Agency to
the Trustee and the NIMS Insurer. Eligible Accounts may bear
interest.
"Eligible Investments": Any one or more of the following
obligations
or securities acquired at a purchase price of not greater than par,
regardless
of whether issued or managed by the Depositor, the Servicer, the
NIMS Insurer,
the Trustee or any of their respective Affiliates or for which an
Affiliate of
the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to
timely
payment of principal and interest by, the United States or any
agency or
instrumentality thereof, provided such obligations are backed
by
the full
faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of,
bankers'
acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agents
acting
in their
respective commercial capacities) incorporated under the laws
of
the United
States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities, so
long
as, at the
time of such investment or contractual commitment providing for
such
investment, such depository institution or trust company or its
ultimate
parent has a short-term uninsured debt rating in one of the two
highest
available rating categories of S&P and DBRS and the highest
available
rating category of Fitch and provided that each such investment
has an
original maturity of no more than 365 days and (B) any other
demand
or time
deposit or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with
respect to
any security described in clause (i) above and entered into
with a
depository institution or trust company (acting as principal)
rated
"[___]" or
higher by [___], "[___]" or higher by [_____] and "[___]" or
higher by
[____], provided, however, that collateral transferred pursuant
to such
repurchase obligation must be of the type described in clause
(i)
above and
must (A) be valued daily at current market prices plus accrued
interest or (B)
pursuant to such valuation, be equal, at all times, to
105% of
the cash transferred by the Trustee in exchange for such
collateral
and (C) be delivered to the Trustee or, if the Trustee is
supplying
the collateral, an agent for the Trustee, in such a manner as
to
accomplish
perfection of a security interest in the collateral by
possession
of certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by
any corporation incorporated under the laws of the United
States
of America
or any State thereof and that are rated by each Rating Agency
in its
highest long-term unsecured rating categories at the time of
such
investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified
date not more than 30 days after the date of acquisition
thereof)
that is rated by each Rating Agency in its highest short-term
unsecured
debt rating available at the time of such investment;
(vi) units of money market funds registered under the
Investment
Company
Act of 1940 (including funds managed or advised by the Trustee
or
affiliates
thereof) that, if rated by each Rating Agency, are rated in its
highest
rating category (if so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee and
consented
to by the NIMS Insurer, any other demand, money market or time
deposit,
or any other obligation, security or investment, as may be
acceptable
to the Rating Agencies in writing as an eligible investment of
funds
backing securities having ratings equivalent to its highest
initial
rating of
the Senior Certificates;
provided, that no instrument described hereunder shall evidence
either the
right to receive (a) only interest with respect to the obligations
underlying
such instrument or (b) both principal and interest payments derived
from
obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the
underlying
obligations.
"Eligible Substitute Mortgage Loan": A mortgage loan
substituted
for a Defective Mortgage Loan pursuant to the terms of this
Agreement which
must, on the date of such substitution, (i) have an outstanding
principal
balance (or in the case of a substitution of more than one Mortgage
Loan for
a Defective Mortgage Loan, an aggregate principal balance) not in
excess of
the then outstanding principal balance of the Defective Mortgage
Loan as of
the Due Date in the calendar month during which the substitution
occurs,
(ii) be of the same type (fixed-rate or adjustable-rate) and have a
Mortgage
Interest Rate not less than the Mortgage Interest Rate of the
Defective
Mortgage Loan and not more than 2% in excess of the Mortgage
Interest Rate of
such Defective Mortgage Loan and, with respect to an
Adjustable-Rate Mortgage
Loan, have the same Index as the Defective Mortgage Loan and have a
Gross
Margin equal to or greater than the Defective Mortgage Loan, (iii)
have a
FICO Score not less than the Defective Mortgage Loan, (iv) have a
remaining
term to maturity not more than one year earlier and not later than
the
remaining term to maturity of the Defective Mortgage Loan, (v) have
a
Combined Loan-to-Value Ratio as of the date of substitution not
greater than
the Combined Loan-to-Value Ratio of the Defective Mortgage Loan as
of such
date, (vi) have a Prepayment Charge at least equal in amount of
that of the
Defective Mortgage Loan and (vii) conform to each representation
and warranty
set forth in Section 3.03 of the Originator Mortgage Loan Purchase
Agreement
and Section 3.01 of the Mortgage Loan Purchase Agreement applicable
to the
Defective Mortgage Loan. In the event that one or more
mortgage loans are
substituted for one or more Defective Mortgage Loans, the amounts
described
in clause (i) hereof shall be determined on the basis of aggregate
principal
balance, the Mortgage Interest Rates described in clause (ii)
hereof shall be
determined on the basis of weighted average Mortgage Interest
Rates, the
terms described in clause (iv) hereof shall be determined on the
basis of
weighted average remaining term to maturity, the Combined
Loan-to-Value
Ratios described in clause (v) hereof shall be satisfied as to each
such
mortgage loan and, except to the extent otherwise provided in this
sentence,
the representations and warranties described in clause (vii) hereof
must be
satisfied as to each Eligible Substitute Mortgage Loan or in the
aggregate,
as the case may be.
Any Defective Mortgage Loan that is a Group 1 Mortgage
Loan or Group 2 Mortgage Loan must be replaced by an Eligible
Substitute
Mortgage Loan that will be a Group 1 Mortgage Loan or Group 2
Mortgage Loan,
as applicable.
"ERISA": The Employee Retirement Income Security Act of 1974,
as
amended.
"ERISA-Restricted Certificates": Any of the Class CE, Class P,
Class
R and Class R-X Certificates.
"Escrow Account": The account or accounts created and
maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents,
taxes,
assessments, water rates, mortgage insurance premiums, fire and
hazard insurance
premiums and other payments required to be escrowed by the
Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of
real
property.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Expense Fee Rate": The sum of (i) the Trustee Fee Rate, (ii)
the
Servicing Fee Rate and (iii) the Credit Risk Manager Fee Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution
Date,
the lesser of (x) the Monthly Excess Interest Amount for such
Distribution Date
and (y) the Overcollateralization Deficiency for such Distribution
Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in
Section
3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or
REO Property
(i) purchased by the Originator or the Seller pursuant to or as
contemplated by
Section 2.03, (ii) purchased by the Servicer pursuant to Section
3.16 or (iii)
purchased by the Majority Class CE Certificateholders or the
Servicer pursuant
to Section 10.01), a determination made by the Servicer that all
Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds and other
payments or
recoveries which the Servicer, in its reasonable good faith
judgment, expects to
be finally recoverable in respect thereof have been so recovered.
The Servicer
shall maintain records, prepared by a Servicing Officer, of each
Final Recovery
Determination made thereby.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a
constant
annual rate at which interest accrues in accordance with the
provisions of the
related Mortgage Note.
"Foreclosure Price": The amount reasonably expected to be
received
from the sale of the related Mortgaged Property net of any expenses
associated
with foreclosure proceedings.
"Form 8-K": As defined in Section 3.31(a) hereof.
"Form 8-K Information": As defined in Section 3.31(d) hereof.
"Form 10-D": As defined in Section 3.31(a) hereof.
"Form 10-K": As defined in Section 3.31(a) hereof.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1
and
REMIC 2 consisting of (a) the Prepayment Charges, any Originator
Prepayment
Charge Payment Amounts and any Servicer Prepayment Charge Payment
Amounts and
the right of the Class P Certificateholders to receive such
Prepayment Charges,
Originator Prepayment Charge Payment Amounts and Servicer
Prepayment Charge
Payment Amounts, (b) the right of the Offered Certificates and the
Class M-7
Certificates to receive Cap Carryover Amounts, (c) each Yield
Maintenance
Agreement, the Reserve Accounts and the beneficial interest of the
Class CE
Certificates with respect thereto and (d) the obligation of the
Class CE
Certificates to pay Cap Carryover Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan,
the fixed percentage set forth in the related Mortgage Note that is
added to the
Index on each Adjustment Date in accordance with the terms of the
related
Mortgage Note used to determine the Mortgage Interest Rate for such
Mortgage
Loan.
"Group 1 Cap": As of any Distribution Date and the Class A-1
Certificates, a per annum rate, adjusted by multiplying such rate
by a fraction
equal to 30 over the actual number of days in the related Interest
Accrual
Period, equal to the Weighted Average Net Mortgage Interest Rate
for the Group 1
Mortgage Loans.
"Group 1 Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all interest due and collected
or advanced
with respect to the related Collection Period on the Group 1
Mortgage Loans
received by the Servicer on or prior to the Determination Date for
such
Distribution Date (less the Servicing Fee, amounts available for
reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and
expenses and
indemnification payments reimbursable pursuant to Section 6.03),
(ii) all
Compensating Interest paid by the Servicer on the related
Distribution Date with
respect to such Mortgage Loans, (iii) the portion of any payment in
connection
with any Principal Prepayment (other than any Prepayment Interest
Excess),
substitution, Purchase Price, Termination Price, Insurance Proceeds
or Net
Liquidation Proceeds relating to interest with respect to such
Mortgage Loans
received during the related Prepayment Period and (iv) any
Reimbursement Amount
relating to such Mortgage Loans received during the related
Prepayment Period.
"Group 1 Mortgage Loan": Each Mortgage Loan listed on Exhibit
D-1
hereto.
"Group 1 Principal Percentage": With respect to any
Distribution
Date and the Class A-1 Certificates, the percentage equivalent to a
fraction,
the numerator of which is the Principal Remittance Amount allocable
to the Group
1 Mortgage Loans for such Distribution Date and the denominator of
which is the
Principal Remittance Amount allocable to the Mortgage Loans for
such
Distribution Date.
"Group 1 Senior Principal Distribution Amount": With respect to
any
Distribution Date, (i) before the Stepdown Date or as to which a
Trigger Event
is in effect, the lesser of (a) the Certificate Principal Balance
of the Class
A-1 Certificates immediately prior to such Distribution Date and
(b) the Group 1
Principal Percentage of the Principal Distribution Amount and (ii)
on or after
the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of
(a) the Certificate Principal Balance of the Class A-1 Certificates
immediately
prior to such Distribution Date over (b) the lesser of (x) the
product of (1)
[___]% and (2) the aggregate Principal Balance of the Group 1
Mortgage Loans as
of the last day of the related Collection Period after giving
effect to
Principal Prepayments in the related Prepayment Period and (y) the
amount by
which the aggregate Principal Balance of the Group 1 Mortgage Loans
as of the
last day of the related Collection Period after giving effect to
Principal
Prepayments in the related Prepayment Period exceeds the product of
(1) [___]%
and (2) the aggregate Principal Balance of the Group 1 Mortgage
Loans on the
Cut-off Date.
"Group 2-A Reserve Account": The trust account created and
maintained by the Trustee pursuant to Section 3.04(g) which shall
be entitled
"Group 2-A Reserve Account, Wells Fargo Bank, N.A., as Trustee, in
trust for
registered Holders of the Class A-2, Class A-3 and Class A-4
Certificates of the
ABFC 20 -[___] Trust, ABFC Asset-Backed Certificates, Series 20
-[___]" and
which must be an Eligible Account. Amounts on deposit in the Group
2-A Reserve
Account shall not be invested. The Group 2-A Reserve Account shall
not be an
asset of any REMIC formed under this Agreement.
"Group 2-A Yield Maintenance Agreement": The yield maintenance
agreement between the Trustee, on behalf of the Trust, and the
Group 2-A Yield
Maintenance Agreement Provider attached hereto as Exhibit N. The
Group 2-A Yield
Maintenance Agreement shall not be an asset of any REMIC formed
under this
Agreement.
"Group 2-A Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution Date in [________], the
amount equal
to the product of (a) the excess of the lesser of (i) One-Month
LIBOR and (ii)
the applicable ceiling rate for such Distribution Date over the
strike rate for
such Distribution Date, in each case as set forth on the schedule
attached to
the confirmation to the Group 2-A Yield Maintenance Agreement, (b)
the product
of the cap notional amount and the scale factor for such
Distribution Date, both
as set forth on the schedule attached to the confirmation to the
Group 2-A Yield
Maintenance Agreement and (c) a fraction, the numerator of which is
the actual
number of days elapsed since the previous Distribution Date (or the
Closing
Date, in the case of the first Distribution Date) to but excluding
the current
Distribution Date and the denominator of which is 360.
"Group 2-A Yield Maintenance Agreement Provider":
[_____________]
and any successor thereto.
"Group 2 Cap": As of any Distribution Date and the Class A-2,
Class
A-3 and Class A-4 Certificates, a per annum rate, adjusted by
multiplying such
rate by a fraction equal to 30 over the actual number of days in
the related
Interest Accrual Period, equal to the Weighted Average Net Mortgage
Interest
Rate for the Group 2 Mortgage Loans.
"Group 2 Interest Remittance Amount": As of any Distribution
Date,
the sum, without duplication, of (i) all interest due and collected
or advanced
with respect to the related Collection Period on the Group 2
Mortgage Loans
received by the Servicer on or prior to the Determination Date for
such
Distribution Date (less the Servicing Fee, amounts available for
reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and
expenses and
indemnification payments reimbursable pursuant to Section 6.03),
(ii) all
Compensating Interest paid by the Servicer on the related
Distribution Date with
respect to such Mortgage Loans, (iii) the portion of any payment in
connection
with any Principal Prepayment (other than any Prepayment Interest
Excess),
substitution, Purchase Price, Termination Price, Insurance Proceeds
or Net
Liquidation Proceeds relating to interest with respect to such
Mortgage Loans
received during the related Prepayment Period and (iv) any
Reimbursement Amount
relating to such Mortgage Loans received during the related
Prepayment Period.
"Group 2 Mortgage Loan": Each Mortgage Loan listed on Exhibit
D-2
hereto.
"Group 2 Principal Percentage": With respect to any
Distribution
Date and the Class A-2, Class A-3 and Class A-4 Certificates, the
percentage
equivalent to a fraction, the numerator of which is the Principal
Remittance
Amount allocable to the Group 2 Mortgage Loans for such
Distribution Date and
the denominator of which is the Principal Remittance Amount
allocable to the
Mortgage Loans for such Distribution Date.
"Group 2 Senior Principal Distribution Amount": With respect to
any
Distribution Date (i) before the Stepdown Date or as to which a
Trigger Event is
in effect, the lesser of (a) the aggregate Certificate Principal
Balance of the
Class A-2, Class A-3 and Class A-4 Certificates immediately prior
to such
Distribution Date and (b) the Group 2 Principal Percentage of the
Principal
Distribution Amount and (ii) on or after the Stepdown Date and as
long as a
Trigger Event is not in effect, the excess of (a) the aggregate
Certificate
Principal Balance of the Class A-2, Class A-3 and Class A-4
Certificates
immediately prior to such Distribution Date over (b) the lesser of
(x) the
product of (1) [____]% and (2) the aggregate Principal Balance of
the Group 2
Mortgage Loans as of the last day of the related Collection Period
after giving
effect to Principal Prepayments in the related Prepayment Period
and (y) the
amount by which the aggregate Principal Balance of the Group 2
Mortgage Loans as
of the last day of the related Collection Period after giving
effect to
Principal Prepayments in the related Prepayment Period exceeds the
product of
(1) [____]% and (2) the aggregate Principal Balance of the Group 2
Mortgage
Loans on the Cut-off Date.
"Group Subordinate Amount" for any Distribution Date and (i)
the
Group 1 Mortgage Loans, will be equal to the greater of zero and
the excess of
the aggregate Principal Balance of the Group 1 Mortgage Loans as of
the first
day of the related Collection Period over the Certificate Principal
Balance of
the Class A-1 Certificates immediately prior to such Distribution
Date and (ii)
the Group 2 Mortgage Loans, will be equal to the greater of zero
and the excess
of the aggregate Principal Balance of the Group 2 Mortgage Loans as
of the first
day of the related Collection Period over the aggregate Certificate
Principal
Balance of the Class A-2, Class A-3 and Class A-4 Certificates
immediately prior
to such Distribution Date.
"Indenture": An indenture relating to the issuance of net
interest
margin notes secured by the Class CE Certificates and the Class P
Certificates,
which may or may not be guaranteed by the NIMS Insurer.
"Independent": When used with respect to any specified Person,
any
such Person who (i) is in fact independent of the Depositor, the
Servicer and
their respective Affiliates, (ii) does not have any direct
financial interest in
or any material indirect financial interest in the Depositor or the
Servicer or
any Affiliate thereof, and (iii) is not connected with the
Depositor or the
Servicer or any Affiliate thereof as an officer, employee,
promoter,
underwriter, trustee, partner, director or Person performing
similar functions;
provided, however, that a Person shall not fail to be Independent
of the
Depositor or the Servicer or any Affiliate thereof merely because
such Person is
the beneficial owner of 1% or less of any class of securities
issued by the
Depositor or the Servicer or any Affiliate thereof, as the case may
be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to
the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the
Trust Fund were
a real estate investment trust (except that the ownership tests set
forth in
that section shall be considered to be met by any Person that owns,
directly or
indirectly, 35 percent or more of any Class of Certificates), so
long as the
Trust Fund does not receive or derive any income from such Person
and provided
that the relationship between such Person and the Trust Fund is at
arm's length,
all within the meaning of Treasury Regulations Section
1.856-4(b)(5), or (ii)
any other Person (including the Servicer) if the Trustee has
received an Opinion
of Counsel, which Opinion of Counsel shall be an expense of the
Trust Fund, to
the effect that the taking of any action in respect of any REO
Property by such
Person, subject to any conditions therein specified, that is
otherwise herein
contemplated to be taken by an Independent Contractor will not
cause such REO
Property to cease to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code (determined without regard to the
exception
applicable for purposes of Section 860D(a) of the Code), or cause
any income
realized in respect of such REO Property to fail to qualify as
Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
with
respect to each related Adjustment Date, the index as specified in
the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class CE, Class P, Class R or
Class R-X
Certificate, the amount designated "Initial Certificate Principal
Balance" on
the face thereof.
"Initial Overcollateralization Amount": $[__________].
"Insurance Proceeds": Proceeds of any title policy, hazard policy
or
other insurance policy covering a Mortgage Loan, to the extent such
proceeds are
not to be applied to the restoration of the related Mortgaged
Property or
released to the Mortgagor in accordance with the procedures that
the Servicer
would follow in servicing mortgage loans held for its own account,
subject to
the terms and conditions of the related Mortgage Note and
Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and
the Offered Certificates and the Class M-7 Certificates, the period
from the
preceding Distribution Date to the day prior to the current
Distribution Date
(or, in the case of the first Distribution Date, the period from
the Closing
Date through [__________], 20 ).
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class CE, Class P, Class R and Class R-X
Certificates) and any
Distribution Date, the sum of (a) the excess, if any, of the
Accrued Certificate
Interest and any Interest Carry Forward Amount for the prior
Distribution Date,
over the amount in respect of interest actually distributed on such
Class on
such prior Distribution Date and (b) interest on such excess at the
applicable
Certificate Interest Rate for the actual number of days elapsed on
the basis of
a 360-day year since the prior Distribution Date.
"Interest Percentage": With respect to any Class of Certificates
and
any Distribution Date, the ratio (expressed as a decimal carried to
six places)
of the Accrued Certificate Interest for such Class to the sum of
the Accrued
Certificate Interest for all Classes, in each case with respect to
such
Distribution Date, without regard to shortfalls caused by the
Relief Act or
similar state laws.
"Interest Remittance Amount": As of any Determination Date, the
sum
of the Group 1 Interest Remittance Amount and the Group 2 Interest
Remittance
Amount.
"Late Collections": With respect to any Mortgage Loan, all
amounts
received subsequent to the Determination Date immediately following
any related
Collection Period, whether as late payments of Monthly Payments or
as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which
represent late payments or collections of principal and/or interest
due (without
regard to any acceleration of payments under the related Mortgage
and Mortgage
Note) but delinquent on a contractual basis for such Collection
Period and not
previously recovered.
"LIBOR Business Day": Any day on which banks in London, England
and
The City of New York are open and conducting transactions in
foreign currency
and exchange.
"LIBOR Determination Date": With respect to the Offered
Certificates
and the Class M-7 Certificates, (i) for the first Distribution
Date, the second
LIBOR Business Day preceding the Closing Date and (ii) for each
subsequent
Distribution Date, the second LIBOR Business Day prior to the
immediately
preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in
accordance
with the servicing procedures specified herein, as of the end of
the related
Prepayment Period, that all Liquidation Proceeds, Condemnation
Proceeds and
Insurance Proceeds which it expects to recover with respect to the
liquidation
of the Mortgage Loan or disposition of the related REO Property
have been
recovered.
"Liquidation Proceeds": The amount (other than amounts received
in
respect of the rental of any REO Property prior to REO Disposition)
received by
the Servicer in connection with (i) the taking of all or a part of
a Mortgaged
Property by exercise of the power of eminent domain or condemnation
or (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's
sale,
foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage Loan in such form as is agreed to by the Servicer and the
Trustee
listing (i) the sale price of the related Mortgaged Property or
amount of the
REO Disposition, (ii) the amount of any Realized Loss (or gain)
with respect to
such Liquidated Mortgage Loan, (iii) the expenses relating to the
liquidation of
such Liquidated Mortgage Loan and (iv) such other information as is
agreed to by
the Servicer and the Trustee.
"Loan Group": Any of Loan Group 1 or Loan Group 2.
"Loan Group 1": The Group 1 Mortgage Loans.
"Loan Group 2": The Group 2 Mortgage Loans.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which
the original Mortgage Note has been permanently lost or destroyed
and has not
been replaced, an affidavit from the Seller certifying that the
original
Mortgage Note has been lost, misplaced or destroyed (together with
a copy of the
related Mortgage Note and indemnifying the Trust against any loss,
cost or
liability resulting from the failure to deliver the original
Mortgage Note) in
the form of Exhibit H hereto.
"Majority
Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the
Class CE
Certificates.
"Marker Rate": With respect to the Class CE Certificates and
any
Distribution Date, a per annum rate equal to two (2) times the
weighted average
of the Uncertificated REMIC Pass-Through Rates for REMIC 1 Regular
Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest
LT1M7 and REMIC 1 Regular Interest LT1ZZ, (i) with the rate on each
such REMIC
Regular Interest (other than REMIC 1 Regular Interest LT1ZZ)
subject to a cap
equal to the Pass-Through Rate of its Corresponding Class (taking
into account
in determining any such Pass-through Rate the imposition of the
Group 1 Cap, the
Group 2 Cap or the Pool Cap, as applicable, as described in
footnotes (1)
through (9) to the table in the Preliminary Statement relating to
the
Certificates) for the purposes of this calculation and (ii) with
the rate on
REMIC 1 Regular Interest LT1ZZ subject to a cap of zero for the
purpose of this
calculation; provided, however, that for this purpose, calculations
of the
Uncertificated REMIC 1 Pass-Through Rate and the related caps with
respect to
each such REMIC Regular Interest (other than REMIC 1 Regular
Interest LT1ZZ)
shall be multiplied by a fraction, the numerator of which is the
actual number
of days in the Interest Accrual Period and the denominator of which
is 30.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral
Amount":
With respect to any Distribution Date, the excess of (a) accrued
interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1
Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the
Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC
1
Overcollateralized Amount, in each case for such Distribution Date,
over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1,
REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest
LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest
LT1M5, REMIC 1 Regular Interest LT1M6 and REMIC 1 Regular Interest
LT1M7 each
subject to a cap equal to the Pass-Through Rate of the related
Corresponding
Class for the purpose of this calculation; provided, however, that
for this
purpose, calculations of the Uncertificated REMIC 1 Pass-Through
Rate and the
related caps with respect to Uncertificated Accrued Interest on
REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3,
REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and
REMIC 1
Regular Interest LT1M7 shall be multiplied by a fraction, the
numerator of which
is the actual number of days in the Interest Accrual Period and the
denominator
of which is 30.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the
related Mortgage
Note as the maximum Mortgage Interest Rate thereunder.
"Minimum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the
related Mortgage
Note as the minimum Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and
(without
duplication) any portion of the Principal Distribution Amount
remaining after
principal distributions on the Offered Certificates and the Class
M-7
Certificates.
"Monthly Excess Interest Amount": With respect to each
Distribution
Date, the amount, if any, by which the Interest Remittance Amount
for such
Distribution Date exceeds the aggregate amount distributed on such
Distribution
Date pursuant to paragraphs (i) through (xii) under Section
4.01.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and interest on such Mortgage Loan
which is payable
by the related Mortgagor from time to time under the related
Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in
the amount of interest collectible from the related Mortgagor
pursuant to the
Relief Act or similar state laws; (b) without giving effect to any
extension
granted or agreed to by the Servicer pursuant to Section 3.01; and
(c) on the
assumption that all other amounts, if any, due under such Mortgage
Loan are paid
when due.
"Mortgage": The mortgage, deed of trust or other instrument
creating
a first or second lien on, or first or second priority security
interest in, a
Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional
documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Interest Rate": With respect to each Mortgage Loan,
the
annual rate at which interest accrues on such Mortgage Loan from
time to time in
accordance with the provisions of the related Mortgage Note, which
rate (i) in
the case of each Fixed-Rate Mortgage Loan shall remain constant at
the rate set
forth in the applicable Mortgage Loan Schedule as the Mortgage
Interest Rate in
effect immediately following the Cut-off Date and (ii) in the case
of each
Adjustable-Rate Mortgage Loan (A) as of any date of determination
until the
first Adjustment Date following the Cut-off Date shall be the rate
set forth in
the applicable Mortgage Loan Schedule as the Mortgage Interest Rate
in effect
immediately following the Cut-off Date and (B) as of any date of
determination
thereafter shall be the rate as adjusted on the most recent
Adjustment Date, to
equal the sum, rounded as provided in the Mortgage Note, of the
Index,
determined as set forth in the related Mortgage Note, plus the
related Gross
Margin subject to the limitations set forth in the related Mortgage
Note. With
respect to each Mortgage Loan that becomes an REO Property, as of
any date of
determination, the annual rate determined in accordance with the
immediately
preceding sentence as of the date such Mortgage Loan became an REO
Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to
the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to
time held as
a part of the Trust Fund, the Mortgage Loans so held being
identified in the
Mortgage Loan Schedules.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller
and the Depositor, dated as of [_______] 1, 20 , regarding the
transfer of the
Mortgage Loans by the Seller to or at the direction of the
Depositor.
"Mortgage Loan Schedule": The lists delivered by the Depositor
to
the Trustee and the Servicer of the Group 1 Mortgage Loans and the
Group 2
Mortgage Loans transferred to the Trustee on the Closing Date as
part of the
Trust Fund. The lists shall set forth the following information as
to each
Mortgage Loan:
(1) the
Mortgage Loan identifying number;
(2) the
state and zip code of the Mortgaged Property;
(3) the
type of Residential Dwelling constituting the Mortgaged
Property;
(4) the
occupancy status of the Mortgaged Property at origination;
(5) the
original months to maturity;
(6) the
date of origination;
(7) the
first payment date;
(8) the
stated maturity date;
(9) the
stated remaining months to maturity;
(10) the
original principal amount of the Mortgage Loan;
(11) the
Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the
Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the
current principal and interest payment of the Mortgage Loan as
of
the Cut-off Date;
(14) the
contractual interest paid to date of the Mortgage Loan;
(15) the
Combined Loan-to-Value Ratio at origination and as of the
Cut-off
Date;
(16) a
code indicating the loan performance status of the Mortgage Loan
as
of the Cut-off Date;
(17) a
code indicating the Index that is associated with such Mortgage
Loan;
(18) the
Gross Margin;
(19) the
Periodic Rate Cap;
(20) the
Minimum Mortgage Interest Rate;
(21) the
Maximum Mortgage Interest Rate;
(22) a
code indicating whether the Mortgage Loan has a Prepayment
Charge
and the type of Prepayment Charge and the term;
(23) the
first Adjustment Date immediately following the Cut-off Date;
(24) the
rate adjustment frequency;
(25) the
payment adjustment frequency;
(26) the
purpose of the Mortgage Loan; and
(27) a
code indicating whether the Mortgage Loan is a second lien.
The Mortgage Loan Schedules shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage
Loans in the
aggregate, for the Fixed-Rate Mortgage Loans and for the
Adjustable-Rate
Mortgage Loans: (1) the number of Mortgage Loans; (2) the current
Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate
of the Mortgage Loans; and (4) the weighted average maturity of the
Mortgage
Loans. The Mortgage Loan Schedules shall be amended from time to
time in
accordance with the provisions of this Agreement and a copy of such
amended
Mortgage Loan Schedules shall be furnished by the Depositor to the
Trustee, the
Servicer and the NIMS Insurer. With respect to any Eligible
Substitute Mortgage
Loan, Cut-off Date shall refer to the applicable date of
substitution.
"Mortgage Note": The original executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibits
D-1 and D-2 from time to time, and any REO Properties acquired in
respect
thereof.
"Mortgaged Property": The underlying property securing a
Mortgage
Loan, including any REO Property, consisting of an Estate in Real
Property
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage
Loan or any other disposition of related Mortgaged Property
(including REO
Property) the related Liquidation Proceeds net of unreimbursed
Advances,
unreimbursed Servicing Advances, Servicing Fees and any other
accrued and unpaid
servicing fees received and retained in connection with the
liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan,
the
Mortgage Interest Rate borne by such Mortgage Loan minus the
Expense Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of
the
Trust, including any lease renewed or extended on behalf of the
Trust if the
Trust has the right to renegotiate the terms of such lease.
"NIMS Insurer": Any insurer that is guaranteeing certain
payments
under notes secured by collateral which includes all or a portion
of the Class
CE, Class P, Class R and Class R-X Certificates.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage
Loan that, in
the good faith business judgment of the Servicer, will not or, in
the case of a
proposed Advance or Servicing Advance, would not be ultimately
recoverable from
Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to the Class CE Certificates,
an
amount equal to the aggregate principal balance of the REMIC 1
Regular
Interests.
"Offered Certificates": The Class A-1, Class A-2, Class A-3,
Class
A-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6
Certificates.
"Officers' Certificate": A certificate signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated) or a principal, and by the Treasurer, the Secretary,
or one of the
assistant treasurers or assistant secretaries of the Servicer, the
Seller or the
Depositor, as applicable.
"One-Month LIBOR": With respect to each Interest Accrual Period,
the
rate determined by the Trustee on the related LIBOR Determination
Date on the
basis of the offered rate for one-month United States dollar
deposits, as such
rate appears on the Telerate Page 3750, as of 11:00 a.m. (London
time) on such
LIBOR Determination Date. If no such quotations are available on an
LIBOR
Determination Date, One-Month LIBOR for the related Interest
Accrual Period will
be established by the Trustee as follows:
(i) If on
such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related
Interest
Accrual Period shall be the arithmetic mean of such offered
quotations (rounded
upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on
such LIBOR Determination Date fewer than two Reference Banks
provide such offered quotations, One-Month LIBOR for the related
Interest
Accrual Period shall be the arithmetic mean of the rates quoted by
one or more
major banks in New York City, selected by the Trustee after
consultation with
the Depositor and the NIMS Insurer, as of 11:00 A.M., New York City
time, on
such date for loans in U.S. Dollars to leading European banks for a
period of
one month in amounts approximately equal to the aggregate
Certificate Principal
Balance of the Offered Certificates and the Class M-7 Certificates;
and
(iii) If
no such quotations can be obtained, One-Month LIBOR for the
related Interest Accrual Period shall be One-Month LIBOR for the
prior
Distribution Date.
"Opinion of Counsel": A written opinion of counsel, who may,
without
limitation, be a salaried counsel for the Depositor or the Servicer
except that
any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC
or (b) compliance with the REMIC Provisions must be an opinion of
Independent
counsel.
"Optional Termination Date": The first Distribution Date on
which
the Majority Class CE Certificateholders or, if such holder is the
Seller or is
an affiliate of the Seller, the Servicer, may opt to terminate the
Mortgage Pool
pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect to
each
Class of Certificates, the Certificate Principal Balance thereof on
the Closing
Date, as set forth opposite such Class in the Preliminary
Statement, except with
respect to (i) the Class P, Class R and Class R-X Certificates,
which have an
Original Class Certificate Principal Balance of zero and (ii) the
Class CE
Certificates, which, solely for REMIC purposes, have an Original
Class
Certificate Principal Balance equal to the Initial
Overcollateralization Amount.
"Originator": [_______________] and its successors.
"Originator Mortgage Loan Purchase Agreement": The Flow Sale
and
Servicing Agreement, dated as of [______], as amended, by and among
the Seller,
as purchaser, [_______________] and its affiliates, as sellers.
"Originator Prepayment Charge Payment Amount": The amount payable
by
the Originator pursuant to Section [___] of the Originator Mortgage
Loan
Purchase Agreement in respect of certain Prepayment Charges that
are not
collected from the Mortgagor.
"Overcollateralization Amount": As of any Distribution Date,
the
excess, if any, of (x) the Pool Balance as of the last day of the
related
Collection Period after giving effect to Principal Prepayments in
the related
Prepayment Period over (y) the aggregate Certificate Principal
Balance of all
Classes of Offered Certificates and the Class M-7 Certificates
(after taking
into account all distributions of principal on such Distribution
Date and the
increase of any Certificate Principal Balance as a result of
Subsequent
Recoveries).
"Overcollateralization Deficiency": As of any Distribution Date,
the
excess, if any, of (x) the Targeted Overcollateralization Amount
for such
Distribution Date over (y) the Overcollateralization Amount for
such
Distribution Date, calculated for this purpose after taking into
account the
reduction on such Distribution Date of the Certificate Principal
Balances of all
Classes of Offered Certificates and the Class M-7 Certificates
resulting from
the distribution of the Principal Distribution Amount (but not the
Extra
Principal Distribution Amount) on such Distribution Date, but prior
to taking
into account any Applied Realized Loss Amounts on such Distribution
Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event
is not in
effect, the lesser of (x) the Principal Remittance Amount for such
Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization
Amount for
such Distribution Date, assuming that 100% of the Principal
Remittance Amount is
applied as a principal payment on the Offered Certificates and the
Class M-7
Certificates on such Distribution Date, over (ii) the Targeted
Overcollateralization Amount for such Distribution Date. With
respect to any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in
such
Certificate as the Holder thereof and any other interest therein,
whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate,
the
Class A-2 Pass-Through Rate, the Class A-3 Pass-Through Rate, the
Class A-4
Pass-Through Rate, the Class M-1 Pass-Through Rate, the Class M-2
Pass-Through
Rate, the Class M-3 Pass-Through Rate, the Class M-4 Pass-Through
Rate, the
Class M-5 Pass-Through Rate, the Class M-6 Pass-Through Rate and
the Class M-7
Pass-Through Rate; and in the case of any Regular Interest, the
Pass-Through
Rate set forth in the definition thereof.
With respect to the Class CE Certificates and any Distribution
Date,
a per annum rate equal to the percentage equivalent of a fraction,
the numerator
of which is the sum of the amounts calculated pursuant to clauses
(A) through
(M) below, and the denominator of which is the aggregate of the
Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest
LT1M7 and REMIC 1 Regular Interest LT1ZZ. For purposes of
calculating the
Pass-Through Rate for the Class CE Certificates, the numerator is
equal to the
sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1AA minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A1 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A2 minus the Marker Rate, applied to an amount
equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A3 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A4 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A4;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M1 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M1;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M2 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M2;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M3 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M3;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M4 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M4;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M5 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M5;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M6 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M6;
and
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M6 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M7;
and
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1ZZ minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other than
a
Class CE, Class P, Class R or Class R-X Certificate), a fraction,
expressed as a
percentage, the numerator of which is the Initial Certificate
Principal Balance,
as the case may be, represented by such Certificate and the
denominator of which
is the Original Class Certificate Principal Balance of the related
Class. With
respect to a Class CE or Class P Certificate, the portion of the
Class evidenced
thereby, expressed as a percentage, as stated on the face of such
Certificate;
provided, however, that the sum of all such percentages for each
such Class
totals 100%. With respect to the Class R or the Class R-X
Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set
forth in the
related Mortgage Note, which is the maximum amount by which the
Mortgage
Interest Rate for such Mortgage Loan may increase or decrease
(without regard to
the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest
Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior
to such Adjustment Date.
"Permitted Transferee": Any transferee of a Class R or Class
R-X
Certificate other than a Disqualified Organization, a non-U.S.
Person or a U.S.
Person with respect to whom income on the Class R or Class R-X
Certificate is
attributable to a foreign permanent establishment or fixed base,
within the
meaning of an applicable income tax treaty, of such Person or any
other U.S.
Person.
"Person": Any individual, corporation, partnership, joint
venture,
association, joint stock company, trust, limited liability
company,
unincorporated organization or government or any agency or
political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Pool Cap": As of any Distribution Date, a per annum rate,
adjusted
by multiplying such rate by a fraction equal to 30 over the actual
number of
days in the related Interest Accrual Period, equal to the weighted
average of
the Group 1 Cap and the Group 2 Cap, weighted on the basis of the
related Group
Subordinate Amount. For federal income tax purposes, the economic
equivalent of
such rate shall be expressed as the weighted average of the REMIC 1
Remittance
Rate on (a) REMIC 1 Regular Interest LT1SUB, subject to a cap and
floor equal to
the Weighted Average Net Mortgage Interest Rates of the Group 1
Mortgage Loans
and (b) REMIC 1 Regular Interest LT2SUB, subject to a cap and floor
equal to the
Weighted Average Net Mortgage Interest Rates of the Group 2
Mortgage Loans,
weighted on the basis of the Uncertificated Balance of such REMIC 1
Regular
Interest.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the Servicer
from a Mortgagor
in connection with any voluntary Principal Prepayment in full
pursuant to the
terms of the related Mortgage Note as from time to time held as a
part of the
Trust Fund, the Prepayment Charges so held being identified in the
Mortgage Loan
Schedules (other than any Originator Prepayment Charge Payment
Amount or
Servicer Prepayment Charge Payment Amount).
"Prepayment Interest Excess": With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment in full
during the portion of the related Prepayment Period beginning on
the first day
of the calendar month in which such Distribution Date occurs
through the
Determination Date of the calendar month in which such Distribution
Date occurs,
an amount equal to interest (to the extent received) at the
applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such
Principal
Prepayment for the number of days commencing on the first day of
the calendar
month in which such Distribution Date occurs and ending on the date
on which
such prepayment is so applied.
"Prepayment Interest Shortfall": With respect to any
Distribution
Date, for each Mortgage Loan that was the subject of a Principal
Prepayment
during the portion of the related Prepayment Period occurring in
the prior
calendar month that was applied by the Servicer to reduce the
outstanding
Principal Balance of such Mortgage Loan on a date preceding the
related Due
Date, an amount equal to interest at the applicable Mortgage
Interest Rate (net
of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the
number of days commencing on the date on which the Principal
Prepayment is
applied and ending on the last day of the calendar month in which
applied.
"Prepayment Period": With respect to any Distribution Date, the
period commencing on the day after the Determination Date in the
calendar month
preceding the calendar month in which such Distribution Date occurs
(or, in the
case of the first Distribution Date, on [_________] 1, 20 ) and
ending on the
Determination Date in the calendar month in which such Distribution
Date occurs.
"Principal Balance": As to any Mortgage Loan and any day, other
than
a Liquidated Mortgage Loan, the related Cut-off Date Principal
Balance, minus
the sum of (i) all collections and other amounts credited against
the principal
balance of any such Mortgage Loan, (ii) the principal portion of
Advances, (iii)
any Deficient Valuation and (iv) any principal reduction resulting
from a
Servicer Modification. For purposes of this definition, a
Liquidated Mortgage
Loan shall be deemed to have a Principal Balance equal to the
Principal Balance
of the related Mortgage Loan as of the final recovery of related
Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO
Property and
any day, the Principal Balance of the related Mortgage Loan
immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal
Amortization
received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date,
the
sum of (i) the Principal Remittance Amount minus the
Overcollateralization
Release Amount, if any, and (ii) the Extra Principal Distribution
Amount, if
any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its
scheduled Due
Date and which is not accompanied by an amount of interest
representing the full
amount of scheduled interest due on any Due Date in any month or
months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, to the extent of funds available therefor, the sum (less
amounts available
for reimbursement of Advances and Servicing Advances pursuant to
Section 3.05
and expenses and indemnification payments reimbursable pursuant to
Section 6.03)
of: (i) each payment of principal on a Mortgage Loan due during the
related
Collection Period and received by the Servicer on or prior to the
related
Determination Date, and any Advances with respect thereto, (ii) all
full and
partial Principal Prepayments received by the Servicer during the
related
Prepayment Period, (iii) Insurance Proceeds, Net Liquidation
Proceeds and
Subsequent Recoveries allocable to principal actually collected by
the Servicer
during the related Prepayment Period, (iv) with respect to
Defective Mortgage
Loans repurchased with respect to such Prepayment Period, the
portion of the
Purchase Price allocable to principal, (v) any Substitution
Adjustment Amounts
received during the related Prepayment Period and (vi) on the
Distribution Date
on which the Trust is to be terminated in accordance with Section
10.01 hereof,
that portion of the Termination Price in respect of principal.
"Private Certificates": Any of the Class M-7, Class CE, Class
P,
Class R and Class R-X Certificates.
"Prospectus Supplement": That certain Prospectus Supplement
dated
[__________], 20 relating to the public offering of the Offered
Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property
to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, an
amount equal to the sum of (i) 100% of the Principal Balance
thereof as of the
date of purchase (or such other price as provided in Section
10.01), (ii) in the
case of a Mortgage Loan, accrued interest on such Principal Balance
at the
applicable Mortgage Interest Rate in effect from time to time from
the Due Date
as to which interest was last covered by a payment by the Mortgagor
or an
Advance by the Servicer, which payment or Advance had as of the
date of purchase
been distributed pursuant to Section 4.01, through the end of the
calendar month
in which the purchase is to be effected, (iii) any unreimbursed
Servicing
Advances and Advances and any unpaid Servicing Fees allocable to
such Mortgage
Loan or REO Property, (iv) any amounts previously withdrawn from
the Collection
Account in respect of such Mortgage Loan or REO Property pursuant
to Section
3.13 and (v) in the case of a Mortgage Loan required to be
purchased pursuant to
Section 2.03, expenses reasonably incurred or to be incurred by the
Servicer or
the Trustee in respect of the breach or defect giving rise to the
purchase
obligation.
"Rating Agency or Rating Agencies": [_____], [_____] and [____],
or
their respective successors. If such agencies or their successors
are no longer
in existence, "Rating Agencies" shall be such nationally recognized
statistical
rating organizations as set forth on the most current list of such
organizations
released by the Commission and designated by the Depositor, notice
of which
designation shall be given to the Trustee and the Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan,
the
amount by which the remaining unpaid principal balance of the
Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the
principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a
Deficient
Valuation or a reduction in the Principal Balance thereof resulting
from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1
Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization
Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized
Loss
Amortization Amount, the Class M-5 Realized Loss Amortization
Amount, the Class
M-6 Realized Loss Amortization Amount and the Class M-7 Realized
Loss
Amortization Amount.
"Record Date": With respect to all of the Certificates (other
than
the Private Certificates), the Business Day immediately preceding
such
Distribution Date; provided, however, that if any such Certificate
becomes a
Definitive Certificate, the Record Date for such Certificate shall
be the last
Business Day of the month immediately preceding the month in which
the related
Distribution Date occurs. With respect to the Private Certificates,
the last
Business Day of the month immediately preceding the month in which
the related
Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the
control of or under
common control with the Depositor or the Trustee, (iii) whose
quotations appear
on the Telerate Page 3750 on the relevant LIBOR Determination Date
and (iv)
which have been designated as such by the Trustee; provided,
however, that if
fewer than two of such banks provide a One-Month LIBOR rate, then
any leading
banks selected by the Trustee which are engaged in transactions in
United States
dollar deposits in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates, the
Class
M-7 Certificates and the Class CE Certificates.
"Regulation AB": Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005)) or
by the staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
"Reimbursement Amount": With respect to any Mortgage Loan, any
costs
or damages incurred by the Trust in connection with a breach of the
Originator's
representation set forth in Section [_____] or [_____] of the
Originator
Mortgage Loan Purchase Agreement.
"Related Documents": With respect to any Mortgage Loan, the
related
Mortgage Notes, Mortgages and other related documents.
"Relevant Servicing Criteria": The Servicing Criteria applicable
to
the various parties, as set forth on Exhibit Q attached hereto.
For
clarification purposes, multiple parties can have responsibility
for the same
Relevant Servicing Criteria. With respect to a Servicing Function
Participant
engaged by the Trustee or the Servicer, the term "Relevant
Servicing Criteria"
may refer to a portion of the Relevant Servicing Criteria
applicable to the
Servicer or the Trustee.
"Relief Act": The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall": With respect to any
Distribution
Date, for any Mortgage Loan with respect to which there has been a
reduction in
the amount of interest collectible thereon for the most recently
ended
Collection Period as a result of the application of the Relief Act
or similar
state laws, the amount by which (i) interest collectible on such
Mortgage Loan
during such Collection Period is less than (ii) one month's
interest on the
Principal Balance of such Mortgage Loan at the Mortgage Interest
Rate for such
Mortgage Loan before giving effect to the application of the Relief
Act or
similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of
the sum of
the aggregate Principal Balance of the Mortgage Loans and related
REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through
Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b)
12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount
payable
from or loss attributable to the Mortgage Loans, which shall be
allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1,
REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular
Interest LT1A4,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular
Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7 and
REMIC 1
Regular Interest LT1ZZ.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the
Targeted
Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date
of
determination, (i) 0.50% of the aggregate Uncertificated Principal
Balances of
the REMIC 1 Regular Interests minus (ii) the aggregate of the
Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5, REMIC 1
Regular Interest LT1M6 and REMIC 1 Regular Interest LT1M7, in each
case as of
such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of
the
aggregate Principal Balance of the Mortgage Loans and related REO
Properties
then outstanding and (ii) 1 minus a fraction, the numerator of
which is two
times the aggregate of the Uncertificated Principal Balances of
REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3,
REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6 and
REMIC 1
Regular Interest LT1M7 and the denominator of which is the
aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest
LT1A4, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest
LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest
LT1M7 and REMIC
1 Regular Interest LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1AA
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1A1
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1A2
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1A3
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1A4
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M1
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M2
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M3
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M4
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M5": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M5
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M6": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M6
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M7": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1M7
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1SUB
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1GRP
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT2SUB
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT2GRP
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1XX
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued
hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular
Interest LT1ZZ
shall accrue interest at the related Uncertificated REMIC 1
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC
1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest
LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest
LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest
LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular Interest LT1SUB, REMIC 1
Regular
Interest LT1GRP, REMIC 1 Regular Interest LT2SUB, REMIC 1 Regular
Interest
LT2GRP, REMIC 1 Regular Interest LT1XX and REMIC 1 Regular Interest
LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount
payable
or loss attributable from the Mortgage Loans, which shall be
allocated to REMIC
1 Regular Interest LT1SUB, REMIC 1 Regular Interest LT1GRP, REMIC 1
Regular
Interest LT2SUB, REMIC 1 Regular Interest LT2GRP and REMIC 1
Regular Interest
LT1XX.
"REMIC 1 Subordinated Balance Ratio": The ratio among the
Uncertificated Principal Balances of each REMIC 1 Regular Interest
ending with
the designation "SUB," equal to the ratio among, with respect to
each such REMIC
1 Regular Interest, the excess of (x) the aggregate Principal
Balance of the
Mortgage Loans in the related Loan Group over (y) the current
Certificate
Principal Amount of the Class A Certificates in the related Loan
Group.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear
at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and
related
provisions, and regulations and rulings promulgated thereunder, as
the foregoing
may be in effect from time to time.
"REMIC Regular Interest": Any REMIC 1 Regular Interest or any of
the
Certificates (other than the Class P, Class R and Class R-X
Certificates).
"Remittance Report": A report prepared by the Servicer and
delivered
to the Trustee and the NIMS Insurer pursuant to Section 4.07,
containing the
information attached hereto as Exhibit M.
"Rents from Real Property": With respect to any REO Property,
gross
income of the character described in Section 856(d) of the
Code.
"REO Disposition": The sale or other disposition of an REO
Property
on behalf of the Trust.
"REO Imputed Interest": As to any REO Property, for any
Collection
Period, an amount equivalent to interest (at the Net Mortgage
Interest Rate that
would have been applicable to the related Mortgage Loan had it been
outstanding)
for such Collection Period on the unpaid Principal Balance of the
Mortgage Loan
as of the date of acquisition.
"REO Principal Amortization": With respect to any REO Property,
for
any calendar month, the aggregate of all amounts received in
respect of such REO
Property during such calendar month, whether in the form of rental
income, sale
proceeds (including, without limitation, that portion of the
Termination Price
paid in connection with a purchase of all of the Mortgage Loans and
REO
Properties pursuant to Section 10.01 that is allocable to such REO
Property) or
otherwise, net of any portion of such amounts (i) payable pursuant
to Section
3.13 in respect of the proper operation, management and maintenance
of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant
to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage
Loan and
unreimbursed Servicing Advances and Advances in respect of such REO
Property or
the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer
on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure, as
described in Section 3.13.
"Reportable Event": As defined in Section 3.31(d).
"Request for Release": A release signed by a Servicing Officer,
in
the form of Exhibit E attached hereto.
"Reserve Account": Any of the Class A-1 Reserve Account, the
Group
2-A Reserve Account or the Class M Reserve Account.
"Residential Dwelling": Any one of the following: (i) a
detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a Fannie Mae eligible condominium
project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a
planned unit
development, none of which is a co-operative or mobile home.
"Residual Interest": The sole Class of "residual interests" in
each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any
officer assigned to the Corporate Trust Division (or any successor
thereto),
including any Vice President, Assistant Vice President, Trust
Officer, any
Assistant Secretary, any trust officer or any other officer of the
Trustee
customarily performing functions similar to those performed by any
of the above
designated officers and in each case having direct responsibility
for the
administration of this Agreement.
"Seller": Bank of America, National Association, or its successor
in
interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Senior Certificates": The Class A-1, Class A-2, Class A-3 and
Class
A-4 Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Subordinated Certificates before taking
into account
the distribution of the Principal Distribution Amount on such
Distribution Date
and (ii) the Overcollateralization Amount after taking into account
the
distribution of the Principal Distribution Amount as of the prior
Distribution
Date by (y) the Pool Balance as of the last day of the related
Collection Period
after giving effect to Principal Prepayments in the related
Prepayment Period.
"Senior Principal Distribution Amount": For any Distribution
Date,
the sum of the Group 1 Senior Principal Distribution Amount and the
Group 2
Senior Principal Distribution Amount.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, [____]%.
"Servicer": [_________________], a [________] corporation, or
any
successor servicer appointed as herein provided, in its capacity as
Servicer
hereunder.
"Servicer Event of Termination": One or more of the events
described
in Section 7.01.
"Servicer Modification": A modification to the terms of a
Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the
Mortgagor is
in default or as to which, in the judgment of the Servicer, default
is
reasonably foreseeable.
"Servicer Prepayment Charge Payment Amount": The amount payable
by
the Servicer in respect of any waived Prepayment Charges pursuant
to Section
3.01, which amount shall be equal to the difference between the
amount of
Prepayment Charge due by a Mortgagor before any waiver and the
actual amount of
the Prepayment Charge that was paid by the Mortgagor.
"Servicer Remittance Date": With respect to any Distribution
Date,
one Business Day prior to such Distribution Date.
"Servicing Advances": All customary, reasonable and necessary
"out
of pocket" costs and expenses incurred by the Servicer (including
reasonable
attorneys' fees and disbursements) in the performance of its
servicing
obligations, including, but not limited to, the cost of (i) the
preservation,
restoration, inspection and protection of the Mortgaged Property,
(ii) any
enforcement or judicial proceedings, including foreclosures, (iii)
the
management and liquidation of the REO Property and (iv) compliance
with the
obligations under Section 3.08.
"Servicing Criteria": The "servicing criteria" set forth in
Item
1122(d) of Regulation AB, as such may be amended from time to
time.
"Servicing Fee": With respect to each Mortgage Loan (including
each
REO Property) and for any calendar month, an amount equal to one
month's
interest (or in the event of any payment of interest which
accompanies a
Principal Prepayment in full made by the Mortgagor during such
calendar month,
interest for the number of days covered by such payment of
interest) at the
Servicing Fee Rate on the same principal amount on which interest
on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan, [___]%
per
annum for the first 10 calendar months, [___]% per annum for the
11th through
30th calendar months, and [___]% per annum for all calendar months
thereafter.
"Servicing Function Participant": Any Subservicer, Subcontractor
or
other Person engaged by the Servicer or the Trustee that is
participating in the
servicing function with respect to the Mortgage Loans, within the
meaning of
Item 1122 of Regulation AB.
"Servicing Officer": Any representative or officer of the
Servicer
involved in, or responsible for, the administration and servicing
of Mortgage
Loans, whose name and specimen signature appear on a list of
servicing officers
furnished by the Servicer to the Trustee and the Depositor on the
Closing Date,
as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"Similar Law": As defined in Section 5.02(d) hereof.
"Sponsor": Bank of America, National Association.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms
of
the Certificates and this Agreement but which is not remitted by
the Servicer
because the Servicer is the subject of a proceeding under the
Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of
the Bankruptcy
Code.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date
following the Distribution Date on which the aggregate Certificate
Principal
Balance of the Class A Certificates is reduced to zero and (ii) the
later to
occur of (x) the Distribution Date in [_______] 20 and (y) the
Distribution Date
on which the Senior Enhancement Percentage is greater than or equal
to the
Senior Specified Enhancement Percentage.
"Subcontractor": Any vendor, subcontractor or other Person that
is
not responsible for the overall servicing (as "servicing" is
commonly understood
by participants in the mortgage-backed securities market) of the
Mortgage Loans
but performs one or more discrete functions identified in Item
1122(d) of
Regulation AB with respect to the Mortgage Loans unde the direction
or authority
of the Servicer, a Subservicer or the Trustee.
"Subordinated Certificates": The Class M-1, Class M-2, Class
M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class CE, Class R and
Class R-X
Certificates.
"Subsequent Recovery": Any amount (net of reimbursable
expenses)
received on a Mortgage Loan subsequent to such Mortgage Loan being
determined to
be a Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior month.
"Subservicer": Any Person that services Mortgage Loans on behalf
of
the Servicer and is responsible for the performance (whether
directly or through
Subservicers or Subcontractors) of some or all of the material
servicing
functions required to be performed by the Servicer under this
Agreement, with
respect to some or all of the Mortgage Loans, that are identified
in Item
1122(d) of Regulation AB.
"Subservicing Agreement: Any subservicing agreement between the
Servicer and any Subservicer relating to servicing and/or
administration of
certain Mortgage Loans as provided in Section 3.16.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, [___]% of the Cut-off Date
Aggregate
Principal Balance and (y) on and after the Stepdown Date, (i) if a
Trigger Event
has not occurred, the greater of (A) [___]% of the Pool Balance as
of the last
day of the related Collection Period after giving effect to
Principal
Prepayments in the related Prepayment Period and (B) [___]% of the
Cut-off Date
Aggregate Principal Balance and (ii) if a Trigger Event has
occurred, the
Targeted Overcollateralization Amount for the immediately preceding
Distribution
Date.
"Tax Matters Person": The tax matters person appointed pursuant
to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal
Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit
Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual
Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any
successor
forms, to be filed on behalf of the Trust for each of the two
REMICs created
pursuant to this Agreement under the REMIC Provisions, together
with any and all
other information reports or returns that may be required to be
furnished to the
Certificateholders or filed with the Internal Revenue Service or
any other
governmental taxing authority under any applicable provisions of
federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated
on
the Reuters Telerate Service (or such other page as may replace the
Telerate
Page 3750 page on that service for the purpose of displaying London
interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i)
the
three-month rolling average of 60+ Day Delinquent Loans equals or
exceeds [___]%
of the Senior Enhancement Percentage or (ii) the aggregate amount
of Realized
Losses incurred since the Cut-off Date through the last day of the
related
Collection Period (reduced by the aggregate amount of Subsequent
Recoveries
received since the Cut-off Date through the last day of the related
Collection
Period) divided by the Cut-off Date Aggregate Principal Balance
exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In
Percentage
[_________] through [________]
[___]%
[_________] through [________]
[___]%
[_________] through [________]
[___]%
[_________] and thereafter
[___]%
"Trust": ABFC 20 -[___] Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be
administered hereunder,
with respect to a portion of which two REMIC elections are to be
made, such
entire Trust Fund consisting of: (i) such Mortgage Loans as from
time to time
are subject to this Agreement, together with the Mortgage Files
relating
thereto, and together with all collections thereon and proceeds
thereof, (ii)
any REO Property, together with all collections thereon and
proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under
all
insurance policies required to be maintained pursuant to this
Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Originator
Mortgage Loan
Purchase Agreement and the Mortgage Loan Purchase Agreement
(including any
security interest created thereby), (v) the Trustee's rights under
each Yield
Maintenance Agreement and (vi) the Collection Account, the
Distribution Account
and the Reserve Accounts and such assets that are deposited therein
from time to
time and any investments thereof, together with any and all income,
proceeds and
payments with respect thereto.
"Trustee": Wells Fargo Bank, N.A., a national banking
association,
or any successor Trustee appointed as herein provided.
"Trustee Fee": With respect to any Distribution Date, the product
of
(x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of
the Principal
Balances of all Mortgage Loans as of the opening of business on the
first day of
the related Collection Period.
"Trustee Fee Rate": With respect to any Distribution Date,
[____]%
per annum.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one
month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on
the
Uncertificated Principal Balance of such REMIC Regular Interest. In
each case,
Uncertificated Accrued Interest will be reduced by any Prepayment
Interest
Shortfalls and Relief Act Interest Shortfalls (allocated to such
REMIC Regular
Interests based on their respective entitlements to interest
irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for such
Distribution Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date of determination. As of
the Closing
Date, the Uncertificated Balance of each REMIC 1 Regular Interest
shall equal
the amount set forth in the Preliminary Statement hereto as its
initial
uncertificated balance. On each Distribution Date, the
Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all
distributions
of principal made on such REMIC 1 Regular Interest on such
Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and
appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as
provided in Section 4.08(b). The Uncertificated Balance of REMIC 1
Regular
Interest LT1ZZ shall be increased by interest deferrals as provided
in Section
4.08(a)(i). The Uncertificated Balance of each REMIC 1 Regular
Interest shall
never be less than zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC
1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1
Regular Interest
LT1ZZ, REMIC 1 Regular Interest LT1SUB, REMIC 1 Regular Interest
LT2SUB and
REMIC 1 Regular Interest LT1XX, the Weighted Average Net Mortgage
Rate of the
Mortgage Loans. With respect to REMIC 1 Regular Interest LT1GRP,
the Weighted
Average Net Mortgage Rate of the Group 1 Mortgage Loans. With
respect REMIC 1
Regular Interest LT2GRP, the Weighted Average Net Mortgage Interest
Rate of the
Group 2 Mortgage Loans.
"United States Person" or "U.S. Person": (i) A citizen or
resident
of the United States, (ii) a corporation, partnership or other
entity treated as
a corporation or partnership for United States federal income tax
purposes
organized in or under the laws of the United States or any state
thereof or the
District of Columbia (unless, in the case of a partnership,
Treasury Regulations
provide otherwise), (iii) an estate the income of which is
includible in gross
income for United States tax purposes, regardless of its source, or
(iv) a trust
if a court within the United States is able to exercise primary
supervision over
the administration of the trust and one or more United States
persons have
authority to control all substantial decisions of the trust.
Notwithstanding the
preceding sentence, to the extent provided in Treasury Regulations,
certain
Trusts in existence on August 20, 1996, and treated as United
States persons
prior to such date, that elect to continue to be treated as United
States
persons will also be a U.S. Person; provided, that for purposes of
the
definition of a "Permitted Transferee," a U.S. Person shall not
include any
person whose income is attributable to a foreign permanent
establishment or
fixed base, within the meaning of an applicable income tax treaty,
of such
Person or any other U.S. Person.
"Unpaid Realized Loss Amount": For any of the Class M-1, Class
M-2,
Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates and as to
any Distribution Date, the excess of (x) the aggregate Applied
Realized Loss
Amounts allocated to such Class for all prior Distribution Dates
over (y) the
sum of (a) the cumulative amount of any Subsequent Recoveries
allocated to such
Class and (b) the aggregate Realized Loss Amortization Amounts with
respect to
such Class for all prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the lesser of:
(i)
the lesser of (a) an amount determined by an appraisal done at
origination of
the Mortgage Loan or (b) an amount determined by a review appraisal
conducted by
the Originator, if such review appraisal determines an appraised
value more than
10% lower than the original appraised value thereof, in the case of
a Mortgage
Loan with a Combined Loan-to-Value Ratio less than or equal to 80%,
or more than
5% lower than the original appraised value thereof, in the case of
a Mortgage
Loan with a Combined Loan-to-Value Ratio greater than 80%, as
determined by the
appraisal referred to in clause (i)(a) above; and (ii) the purchase
price paid
for the related Mortgaged Property by the Mortgagor with the
proceeds of the
Mortgage Loan; provided, however, that in the case of a refinanced
Mortgage
Loan, the value of the Mortgaged Property is based solely upon
clause (i) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting
Rights allocated
among Holders of the Offered Certificates and the Class M-7
Certificates shall
be 98%, and shall be allocated among each such Class according to
the fraction,
expressed as a percentage, the numerator of which is the aggregate
Certificate
Principal Balance of all the Certificates of such Class then
outstanding and the
denominator of which is the aggregate Certificate Principal Balance
of all the
Offered Certificates and the Class M-7 Certificates then
outstanding. The Voting
Rights allocated to each such Class of Certificates shall be
allocated among all
holders of each such Class in proportion to the outstanding
Certificate
Principal Balance of such Certificates; provided, however, that any
Certificate
registered in the name of the Servicer, the Depositor or the
Trustee or any of
their respective affiliates shall not be included in the
calculation of Voting
Rights; provided that only such Certificates as are known by a
Responsible
Officer of the Trustee to be so registered will be so excluded. 1%
of all the
Voting Rights will be allocated to the Holders of each of the Class
CE and Class
P Certificates. The Class R and Class R-X Certificates shall have
no Voting
Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based
on
Principal Balance as of the first day of the related Collection
Period or, in
the case of the first Distribution Date, the Cut-Off Date) of the
Net Mortgage
Interest Rates of the Mortgage Loans, the Group 1 Mortgage Loans or
the Group 2
Mortgage Loans, as applicable, expressed for each such Mortgage
Loan as an
annual rate and calculated on the basis of twelve months consisting
of 30 days
each and a 360-day year.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver
the
Certificates.
"Yield Maintenance Agreement": Any of the Class A-1 Yield
Maintenance Agreement, the Group 2-A Yield Maintenance Agreement or
the Class M
Yield Maintenance Agreement.
"Yield Maintenance Agreement Payment": Any of the Class A-1
Yield
Maintenance Agreement Payment, Group 2-A Yield Maintenance
Agreement Payment or
the Class M Yield Maintenance Agreement Payment.
"Yield Maintenance Agreement Provider": Any of the Class A-1
Yield
Maintenance Agreement Provider, Group 2-A Yield Maintenance
Agreement Provider
or the Class M Yield Maintenance Agreement Provider.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any
definition
or calculation, whenever amounts are required to be netted,
subtracted or added
or any distributions are taken into account such definition or
calculation and
any related definitions or calculations shall be determined without
duplication
of such functions.
Section
1.03 Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this
Agreement
shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain
payments of notes issued pursuant to the Indenture and (ii) any
series of notes
issued pursuant to the Indenture remains outstanding or the NIMS
Insurer is owed
amounts in respect of its guarantee of payment on such notes;
provided, however,
the NIMS Insurer shall not have any rights hereunder (except
pursuant to Section
11.01 in the case of clause (ii) below) during the period of time,
if any, that
(i) the NIMS Insurer has not undertaken to guarantee certain
payments of notes
issued pursuant to the Indenture or (ii) any default has occurred
and is
continuing under the insurance policy issued by the NIMS Insurer
with respect to
such notes.
Section 1.04 Fiscal Year.
The fiscal year of the Trust will be the calendar year.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and otherwise convey to the
Trustee, on
behalf of the Trust, without recourse for the benefit of the
Certificateholders
all the right, title and interest of the Depositor, including any
security
interest therein for the benefit of the Depositor, in and to (i)
each Mortgage
Loan identified on the Mortgage Loan Schedules, including the
related Cut-off
Date Principal Balance, all interest accruing thereon after the
Cut-off Date and
all collections in respect of interest and principal due after the
Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has
been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest
in any
insurance policies in respect of the Mortgage Loans; (iv) all other
assets
included or to be included in the Trust Fund; (v) all proceeds of
any of the
foregoing; (vi) the rights of the Depositor under the Consulting
Agreement; and
(vii) the rights of the Depositor under the Originator Mortgage
Loan Purchase
Agreement and the Mortgage Loan Purchase Agreement. Such assignment
includes all
interest and principal due to the Depositor or the Servicer after
the Cut-off
Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor
does
hereby deliver to, and deposit with the Trustee, or its designated
agent, the
following documents or instruments with respect to each Mortgage
Loan (a
"Mortgage File") so transferred and assigned:
(i) the
original Mortgage Note, endorsed in blank or with respect to
any
lost Mortgage Note, an original Lost Note Affidavit, together with
a copy of the
related Mortgage Note;
(ii) the
original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a
power of attorney, with evidence of recording thereon or, if such
Mortgage or
power of attorney has been submitted for recording but has not been
returned
from the applicable public recording office, has been lost or is
not otherwise
available, a copy of such Mortgage or power of attorney, as the
case may be,
certified to be a true and complete copy of the original submitted
for
recording;
(iii) an
original Assignment of Mortgage, in form and substance
acceptable
for recording. The Mortgage shall be assigned in blank;
(iv) an
original copy of any intervening assignment of Mortgage showing
a
complete chain of assignments;
(v) the
original or a certified copy of lender's title insurance
policy;
and
(vi) the
original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
The Trustee agrees to execute and deliver to the Depositor on
or
prior to the Closing Date an acknowledgment of receipt of the
original Mortgage
Note (with any exceptions noted), substantially in the form
attached as Exhibit
F-3 hereto.
If any of the documents referred to in Section 2.01(ii), (iii)
or
(iv) above has as of the Closing Date been submitted for recording
but either
(x) has not been returned from the applicable public recording
office or (y) has
been lost or such public recording office has retained the original
of such
document, the obligations of the Depositor to deliver such
documents shall be
deemed to be satisfied upon (1) delivery to the Trustee no later
than the
Closing Date, of a copy of each such document certified by the
Seller in the
case of (x) above or the applicable public recording office in the
case of (y)
above to be a true and complete copy of the original that was
submitted for
recording and (2) if such copy is certified by the Seller, delivery
to the
Trustee, promptly upon receipt thereof of either the original or a
copy of such
document certified by the applicable public recording office to be
a true and
complete copy of the original. The Depositor shall deliver or cause
to be
delivered to the Trustee promptly upon receipt thereof any other
documents
constituting a part of a Mortgage File received with respect to any
Mortgage
Loan, including, but not limited to, any original documents
evidencing an
assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File,
the Seller
shall have 120 days to cure such defect or 150 days following the
Closing Date,
in the case of missing Mortgages or Assignments or deliver such
missing document
to the Trustee. If the Seller does not cure such defect or deliver
such missing
document within such time period, the Seller shall either
repurchase or
substitute for such Mortgage Loan in accordance with Section
2.03.
The Depositor herewith delivers to the Trustee executed copies
of
the Originator Mortgage Loan Purchase Agreement and the Mortgage
Loan Purchase
Agreement.
Concurrently with the execution and delivery of this Agreement,
the
Depositor shall deliver the Mortgage Loan Schedules to the Trustee
and the
Servicer. The Depositor and the Trustee shall provide a copy of the
Mortgage
Loan Schedules to any Certificateholder upon written request made
to either of
them at the addresses set forth on Exhibits D-1 and D-2, as the
same may be
amended from time to time by written notice from such party to the
other parties
hereto.
It is agreed and understood by the parties hereto that it is
not
intended that any mortgage loan be included in the Trust that is a
"High-Cost
Home Loan" as defined in any of (i) the New Jersey Home Ownership
Act effective
November 27, 2003, (ii) the New Mexico Home Loan Protection Act,
effective
January 1, 2004, (iii) the Massachusetts Predatory Home Loan
Practices Act,
effective November 7, 2004 or (iv) the Indiana Home Loan Practices
Act,
effective January 1, 2005.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges the receipt of, subject to the
provisions
of Section 2.01 and subject to the review described below and any
exceptions
noted on the exception report described in the next paragraph
below, the
documents referred to in Section 2.01 above and all other assets
included in the
definition of "Trust Fund" and declares that it holds and will hold
such
documents and the other documents delivered to it constituting a
Mortgage File,
and that it holds or will hold all such assets and such other
assets included in
the definition of "Trust Fund" in trust for the exclusive use and
benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to
review each Mortgage File within 60 days after the Closing Date
(or, with
respect to any document delivered after the Startup Day, within 60
days of
receipt and with respect to any Qualified Substitute Mortgage,
within 60 days
after the assignment thereof) and to certify in substantially the
form attached
hereto as Exhibit F-1 that, as to each Mortgage Loan listed in the
Mortgage Loan
Schedules (other than any Mortgage Loan paid in full or any
Mortgage Loan
specifically identified in the exception report annexed thereto as
not being
covered by such certification), (i) all documents required to be
delivered to it
pursuant to Section 2.01 of this Agreement are in its possession,
(ii) such
documents have been reviewed by it and have not been mutilated,
damaged or torn
and relate to such Mortgage Loan and (iii) based on its examination
and only as
to the foregoing, the information set forth in the Mortgage Loan
Schedules that
corresponds to items (1), (2), (3), (10) and (22) of the Mortgage
Loan Schedules
accurately reflects information set forth in the Mortgage File. It
is herein
acknowledged that, in conducting such review, the Trustee is under
no duty or
obligation to inspect, review or examine any such documents,
instruments,
certificates or other papers to determine that they are genuine,
enforceable, or
appropriate for the represented purpose or that they have actually
been recorded
or that they are other than what they purport to be on their
face.
Prior to the first anniversary date of this Agreement the
Trustee
shall deliver to the Depositor, the Servicer and the NIMS Insurer a
final
certification in the form annexed hereto as Exhibit F-2 evidencing
the
completeness of the Mortgage Files, with any applicable exceptions
noted
thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to
above, the Trustee
finds any document or documents constituting a part of a Mortgage
File to be
missing or defective in any material respect, at the conclusion of
its review
the Trustee shall so notify the Seller, the Depositor, the NIMS
Insurer and the
Servicer. In addition, upon the discovery by the Originator, the
Seller, the
Depositor, the NIMS Insurer, the Trustee or the Servicer (or upon
receipt by the
Trustee of written notification of such breach) of a breach of any
of the
representations and warranties made by the Originator in the
Originator Mortgage
Loan Purchase Agreement or the Seller in the Mortgage Loan Purchase
Agreement in
respect of any Mortgage Loan which materially adversely affects
such Mortgage
Loan or the interests of the related Certificateholders in such
Mortgage Loan,
the party discovering such breach shall give prompt written notice
to the other
parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage
Loans and the
Related Documents, conveying good title thereto free and clear of
any liens and
encumbrances, from the Depositor to the Trustee and that such
property not be
part of the Depositor's estate or property of the Depositor in the
event of any
insolvency by the Depositor. In the event that such conveyance is
deemed to be,
or to be made as security for, a loan, the parties intend that the
Depositor
shall be deemed to have granted and does hereby grant to the
Trustee, on behalf
of the Trust, a first priority perfected security interest in all
of the
Depositor's right, title and interest in and to the Mortgage Loans
and the
Related Documents, and that this Agreement shall constitute a
security agreement
under applicable law.
The Trustee is hereby directed to execute and deliver, on behalf
of
the Trust, the Class A-1 Yield Maintenance Agreement, Group 2-A
Yield
Maintenance Agreement and Class M Yield Maintenance Agreement.
Section 2.03 Repurchase or Substitution of Mortgage Loans by
the
Originator or the Seller.
(a) Upon discovery or receipt of written notice of any
materially
defective document in, or that a document is missing from, a
Mortgage File or of
the breach by the Originator or the Seller of any representation or
warranty
under the Originator Mortgage Loan Purchase Agreement or the
Mortgage Loan
Purchase Agreement, as applicable, in respect of any Mortgage Loan
which
materially adversely affects the value of such Mortgage Loan,
Prepayment Charge
or the interest therein of the Certificateholders, the Trustee
shall promptly
notify the Originator or the Seller, as the case may be, the
Servicer and the
NIMS Insurer of such defect, missing document or breach and request
that, in the
case of a defective or missing document, the Seller cure such
defect or deliver
such missing document within 120 days from the date the Seller was
notified of
such missing document or defect or, in the case of a beach of a
representation
or warranty, request the Originator or the Seller, as applicable,
cure such
breach within 90 days from the date the Originator or the Seller,
as the case
may be, was notified of such breach. If the Seller does not deliver
such missing
document or cure such defect or if the Originator or the Seller, as
applicable,
does not cure such breach in all material respects during such
period, the
Trustee shall enforce the Originator's or the Seller's obligation,
as the case
may be, under the Originator Mortgage Loan Purchase Agreement or
the Mortgage
Loan Purchase Agreement, as applicable, and cause the Originator or
the Seller,
as applicable, to repurchase such Mortgage Loan from the Trust Fund
at the
Purchase Price on or prior to the Determination Date following the
expiration of
such period (subject to Section 2.03(d)). The Purchase Price for
the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the
Trustee,
upon receipt of written notice from the Servicer of such deposit,
shall release
to the Originator or the Seller, as applicable, the related
Mortgage File and
shall execute and deliver such instruments of transfer or
assignment, in each
case without recourse, as the Originator or the Seller, as
applicable, shall
furnish to it and as shall be necessary to vest in the Originator
or the Seller,
as the case may be, any Mortgage Loan released pursuant hereto and
the Trustee
shall have no further responsibility with regard to such Mortgage
File. In lieu
of repurchasing any such Mortgage Loan as provided above, the
Originator or the
Seller, as the case may be, may cause such Mortgage Loan to be
removed from the
Trust Fund (in which case it shall become a Defective Mortgage
Loan) and
substitute one or more Eligible Substitute Mortgage Loans in the
manner and
subject to the limitations set forth in Section 2.03(c).
With respect to the representations and warranties set forth in
the
Originator Mortgage Loan Purchase Agreement and the Mortgage Loan
Purchase
Agreement that are made to the best of the Originator's or the
Seller's
knowledge, as applicable, or as to which the Originator or the
Seller, as the
case may be, has no knowledge, if it is discovered by the
Depositor, the
Servicer, the NIMS Insurer or the Trustee that the substance of
such
representation and warranty is inaccurate and such inaccuracy
materially and
adversely affects the value of the related Mortgage Loan,
Prepayment Charge or
the interest therein of the Certificateholders then,
notwithstanding the
Originator's or the Seller's lack of knowledge with respect to the
substance of
such representation and warranty being inaccurate at the time the
representation
or warranty was made, such inaccuracy shall be deemed a breach of
the applicable
representation or warranty.
It is understood and agreed that the representations and
warranties
set forth in the Originator Mortgage Loan Purchase Agreement and
the Mortgage
Loan Purchase Agreement shall survive delivery of the Mortgage
Files to the
Trustee and the Closing Date and shall inure to the benefit of
the
Certificateholders notwithstanding any restrictive or qualified
endorsement or
assignment. It is understood and agreed that the obligations of the
Originator
and the Seller set forth in this Section 2.03(a) to cure,
substitute for or
repurchase a Mortgage Loan pursuant to the Originator Mortgage Loan
Purchase
Agreement or the Mortgage Loan Purchase Agreement, as applicable,
and to pay the
Reimbursement Amount constitute the sole remedies available to
the
Certificateholders and to the Trustee on their behalf respecting a
breach of the
representations and warranties contained in the Mortgage Loan
Purchase
Agreement.
The representations and warranties of the Originator with respect
to
the Mortgage Loans in the Originator Mortgage Loan Purchase
Agreement, which
have been assigned to the Trustee hereunder, were made as of the
dates specified
in the Originator Mortgage Loan Purchase Agreement. To the extent
that any fact,
condition or event with respect to a Mortgage Loan constitutes a
breach of both
(i) a representation or warranty of the Originator under the
Originator Mortgage
Loan Purchase Agreement and (ii) a representation or warranty of
the Seller
under the Mortgage Loan Purchase Agreement (other than Seller's
representations
with respect to predatory and abusive lending laws in Section
[____] and [____]
of the Mortgage Loan Purchase Agreement), the only right or remedy
of the
Trustee or of any Certificateholder shall be the Trustee's right to
enforce the
obligations of the Originator under any applicable representation
or warranty
made by it. The Trustee acknowledges that the Seller shall have no
obligation or
liability with respect to any breach of a representation or
warranty made by it
with respect to the Mortgage Loans (except as otherwise set forth
in this
paragraph) if the fact, condition or event constituting such breach
also
constitutes a breach of a representation or warranty made by the
Originator in
the Originator Mortgage Loan Purchase Agreement, without regard to
whether the
Originator fulfills its contractual obligations in respect of
such
representation or warranty. In addition, to the extent that any
fact, condition
or event with respect to a Mortgage Loan constitutes a breach of
both (x) the
Originator's representation with respect to predatory and abusive
lending laws
in Section [____] or [____] of the Originator Mortgage Loan
Purchase Agreement
and (y) the Seller's representation with respect to predatory and
abusive
lending laws in Section [____] or [____] of the Mortgage Loan
Purchase
Agreement, the Originator shall be obligated to pay the
Reimbursement Amount
relating to such Mortgage Loan, and, to the extent the Originator
fails to do
so, the Trustee shall be entitled to enforce the Seller's
obligation to pay such
Reimbursement Amount. In any event, the Reimbursement Amount shall
be delivered
to the Servicer for deposit into the Collection Account within 10
days from the
date the Seller was notified by the Trustee of the Reimbursement
Amount.
(b) Within 90 days of the earlier of discovery by the Servicer
or
receipt of notice by the Servicer of the breach of any
representation, warranty
or covenant of the Servicer set forth in Section 2.05 which
materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be
effected prior
to the last Business Day that is within two years after the Closing
Date. As to
any Defective Mortgage Loan for which the Originator or the Seller
substitutes
an Eligible Substitute Mortgage Loan or Loans, such substitution
shall be
effected by the Originator or the Seller, as applicable, delivering
to the
Trustee for such Eligible Substitute Mortgage Loan or Loans, the
Mortgage Note,
the Mortgage, the Assignment to the Trustee, and such other
documents and
agreements, with all necessary endorsements thereon, as are
required by Section
2.01, together with an Officers' Certificate providing that each
such Eligible
Substitute Mortgage Loan satisfies the definition thereof and
specifying the
Substitution Adjustment Amount (as described below), if any, in
connection with
such substitution. The Trustee shall acknowledge receipt for such
Eligible
Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter,
shall review such documents as specified in Section 2.02 and
deliver to the
Servicer and the NIMS Insurer, with respect to such Eligible
Substitute Mortgage
Loan or Loans, a certification substantially in the form attached
hereto as
Exhibit F-1, with any applicable exceptions noted thereon. Within
one year of
the date of substitution, the Trustee shall deliver to the Servicer
and the NIMS
Insurer a certification substantially in the form of Exhibit F-2
hereto with
respect to such Eligible Substitute Mortgage Loan or Loans, with
any applicable
exceptions noted thereon. Monthly Payments due with respect to
Eligible
Substitute Mortgage Loans in the month of substitution are not part
of the Trust
Fund and will be retained by the Originator or the Seller, as
applicable. For
the month of substitution, distributions to Certificateholders will
reflect the
collections and recoveries in respect of such Defective Mortgage
Loan in the
Collection Period or Prepayment Period, as applicable, preceding
the date of
substitution and the Depositor, the Originator or the Seller, as
the case may
be, shall thereafter be entitled to retain all amounts subsequently
received in
respect of such Defective Mortgage Loan. The Depositor shall give
or cause to be
given written notice to the Certificateholders and the NIMS Insurer
that such
substitution has taken place, shall amend the applicable Mortgage
Loan Schedule
to reflect the removal of such Defective Mortgage Loan from the
terms of this
Agreement and the substitution of the Eligible Substitute Mortgage
Loan or Loans
and shall deliver a copy of such amended Mortgage Loan Schedule to
the Trustee
and the NIMS Insurer. Upon such substitution, such Eligible
Substitute Mortgage
Loan or Loans shall constitute part of the Mortgage Pool and shall
be subject in
all respects to the terms of this Agreement and, in the case of a
substitution
effected by the Originator or the Seller, the Originator Mortgage
Loan Purchase
Agreement or the Mortgage Loan Purchase Agreement, as the case may
be,
including, in the case of a substitution effected by the Originator
or the
Seller, all applicable representations and warranties thereof
included in the
Originator Mortgage Loan Purchase Agreement or the Mortgage Loan
Purchase
Agreement, as the case may be, as of the date of substitution.
For any month in which the Originator or the Seller substitutes
one
or more Eligible Substitute Mortgage Loans for one or more
Defective Mortgage
Loans, the Servicer will determine the amount (the "Substitution
Adjustment
Amount"), if any, by which the aggregate Purchase Price of all such
Defective
Mortgage Loans exceeds the aggregate, as to each such Eligible
Substitute
Mortgage Loan, of the principal balance thereof as of the date of
substitution,
together with one month's interest on such principal balance at the
applicable
Net Mortgage Interest Rate. On the date of such substitution, the
Originator or
the Seller, as the case may be, will deliver or cause to be
delivered to the
Servicer for deposit in the Collection Account an amount equal to
the
Substitution Adjustment Amount, if any, and the Trustee, upon
receipt of the
related Eligible Substitute Mortgage Loan or Loans and notice by
the Servicer of
such deposit, shall release to the Originator or the Seller, as
applicable, the
related Mortgage File or Files and shall execute and deliver such
instruments of
transfer or assignment, in each case without recourse, as the
Originator or the
Seller, as the case may be, shall deliver to it and as shall be
necessary to
vest therein any Defective Mortgage Loan released pursuant
hereto.
In addition, the Originator or the Seller, as applicable, shall
obtain at its own expense and deliver to the Trustee and the NIMS
Insurer an
Opinion of Counsel to the effect that such substitution will not
cause (a) any
federal tax to be imposed on the Trust Fund, including without
limitation, any
federal tax imposed on "prohibited transactions" under Section
860F(a)(l) of the
Code or on "contributions after the startup date" under Section
860G(d)(l) of
the Code, or (b) any REMIC to fail to qualify as a REMIC at any
time that any
Certificate is outstanding. If such Opinion of Counsel can not be
delivered,
then such substitution may only be effected at such time as the
required Opinion
of Counsel can be given.
(d) Upon discovery by the Originator, the Seller, the Servicer,
the
NIMS Insurer or the Trustee that any Mortgage Loan does not
constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the
party discovering such fact shall within two Business Days give
written notice
thereof to the other parties. In connection therewith, the
Originator or the
Seller, as applicable, shall repurchase or, subject to the
limitations set forth
in Section 2.03(c), substitute one or more Eligible Substitute
Mortgage Loans
for the affected Mortgage Loan within 90 days of the earlier of
discovery or
receipt of such notice with respect to such affected Mortgage Loan.
In addition,
upon discovery that a Mortgage Loan is defective in a manner that
would cause it
to be a "defective obligation" within the meaning of Treasury
Regulations
relating to REMICs, the Originator or the Seller, as the case may
be, shall cure
the defect or make the required purchase or substitution no later
than 90 days
after the discovery of the defect. Any such repurchase or
substitution shall be
made in the same manner as set forth in Section 2.03(a). The
Trustee shall
reconvey to the Originator or the Seller, as applicable, the
Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms
and
conditions, as it would a Mortgage Loan repurchased for breach of
a
representation or warranty.
Section 2.04 [Reserved].
Section 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the
Certificateholders and
to the Depositor and the NIMS Insurer that as of the Closing Date
or as of such
date specifically provided herein:
(i) The Servicer is a corporation duly organized, validly
existing
and in
good standing under the laws of [_________] and has all
licenses
necessary
to carry on its business as now being conducted, except for
such
licenses,
certificates and permits the absence of which, individually or
in the
aggregate, would not have a material adverse effect on the
ability
of the
Servicer to conduct its business as it is presently conducted,
and
is
licensed, qualified and in good standing in the states where
the
Mortgaged
Property is located if the laws of such state require licensing
or
qualification in order to conduct business of the type conducted by
the
Servicer
or to ensure the enforceability or validity of each Mortgage
Loan; the
Servicer has the power and authority to execute and deliver
this
Agreement
and to perform in accordance herewith; the execution, delivery
and
performance of this Agreement (including all instruments of
transfer
to be
delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly
and
validly
authorized; and all requisite corporate action has been taken
by
the
Servicer to make this Agreement valid and binding upon the Servicer
in
accordance
with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement
are in the ordinary course of business of the Servicer and will
not result
in the breach of any term or provision of the articles of
incorporation or by-laws of the Servicer or result in the breach of
any
term or
provision of, or conflict with or constitute a default under or
result in
the acceleration of any obligation under, any agreement,
indenture
or loan or credit agreement or other instrument to which the
Servicer
or its property is subject, or result in the violation of any
law, rule, regulation,
order, judgment or decree to which the Servicer or
its
property is subject;
(iii) The Servicer is an approved seller/servicer of
conventional
residential mortgage loans for Fannie Mae or Freddie Mac, with
the
facilities, procedures, and experienced personnel necessary for the
sound
servicing
of mortgage loans of the same type as the Mortgage Loans. The
Servicer
is a HUD approved mortgagee pursuant to Section 203 of the
National
Housing Act and is in good standing to sell mortgage loans to
and
service
mortgage loans for Fannie Mae or Freddie Mac, and no event has
occurred,
including but not limited to a change in insurance coverage,
which
would make the Servicer unable to comply with Fannie Mae or
Freddie
Mac
eligibility requirements or which would require notification to
either
Fannie Mae
or Freddie Mac;
(iv) This Agreement, and all documents and instruments
contemplated
hereby
which are executed and delivered by the Servicer, constitute
and
will
constitute valid, legal and binding obligations of the
Servicer,
enforceable in accordance with their respective terms, except as
the
enforcement thereof may be limited by applicable bankruptcy,
insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement
of
creditors' rights generally (whether considered in a proceeding at
law
or in
equity);
(v) The Servicer does not believe, nor does it have any reason
or
cause to
believe, that it cannot perform each and every covenant
contained
in this
Agreement;
(vi) There is no action, suit, proceeding or investigation
pending
or, to its
knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material
adverse
change in
the business, operations, financial condition, properties or
assets of
the Servicer, or in any material impairment of the right or
ability of
the Servicer to carry on its business substantially as now
conducted,
or in any material liability on the part of the Servicer, or
that would
draw into question the validity or enforceability of this
Agreement
or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be
likely
to impair
materially the ability of the Servicer to perform under the
terms of
this Agreement;
(vii) No
consent, approval or order of any court or governmental
agency or
body is required for the execution, delivery and performance by
the
Servicer of or compliance by the Servicer with this Agreement or
the
consummation of the transactions contemplated by this Agreement,
except
for such
consents, approvals, authorizations and orders, if any, that
have
been
obtained; and
(viii) No information in this Agreement provided by the Servicer
nor
any
information, certificate of an officer, statement furnished in
writing
or report
delivered to the Trustee by the Servicer in connection with the
transactions contemplated hereby contains or will contain any
untrue
statement
of a material fact or omits or will omit to state a material
fact
necessary in order to make the statements contained therein, in
light
of the
circumstances under which they were made, not misleading.
(ix) The Servicer has fully furnished, and shall continue to
fully
furnish
for so long as it is servicing the Mortgage Loans hereunder, in
accordance
with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on the Mortgagor
credit
files to
Equifax, Experian and Trans Union Credit Information Company on
a
monthly
basis.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.05 shall survive delivery of
the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee,
the
Depositor, the NIMS Insurer and the Certificateholders. Upon
discovery by any of
the Depositor, the Servicer, the NIMS Insurer or the Trustee of a
breach of any
of the foregoing representations, warranties and covenants which
materially and
adversely affects the value of any Mortgage Loan, Prepayment Charge
or the
interests therein of the Certificateholders, the party discovering
such breach
shall give prompt written notice (but in no event later than two
Business Days
following such discovery) to the other parties hereto.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee
on behalf of the Certificateholders and to the Servicer and the
NIMS Insurer as
follows:
(i) This agreement constitutes a legal, valid and binding
obligation
of the
Depositor, enforceable against the Depositor in accordance with
its
terms,
except as enforceability may be limited by applicable
bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or
hereafter
in effect affecting the enforcement of creditors' rights in
general
and except as such enforceability may be limited by general
principles
of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the
Depositor
to the
Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor
had good
and marketable title to each Mortgage Loan (insofar as such
title
was
conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge
or
other
encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right,
title interest in the Mortgage Loans to the Trustee on behalf
of
the
Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the
Trustee on
behalf of the Trust with any intent to hinder, delay or defraud
any of its
creditors;
(v) The Depositor has been duly incorporated and is validly
existing
as a
corporation in good standing under the laws of the State of
Delaware,
with full
corporate power and authority to own its assets and conduct its
business
as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or
observance of
any
material obligation, agreement, covenant or condition contained in
any
contract,
indenture, mortgage, loan agreement, note, lease or other
instrument
to which the Depositor is a party or by which it or its
properties
may be bound, which default might result in any material
adverse
changes in the financial condition, earnings, affairs or
business
of the
Depositor or which might materially and adversely affect the
properties
or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
by
the
Depositor, and the consummation of the transactions
contemplated
thereby,
do not and will not result in a material breach or violation of
any of the
terms or provisions of, or, to the knowledge of the Depositor,
constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement
or other agreement or instrument to which the Depositor is a
party or
by which the Depositor is bound or to which any of the property
or assets
of the Depositor is subject, nor will such actions result in
any
violation
of the provisions of the certificate of incorporation or
by-laws
of the
Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or
regulation of
any court
or governmental agency or body having jurisdiction over the
Depositor
or any of its properties or assets (except for such conflicts,
breaches,
violations and defaults as would not have a material adverse
effect on
the ability of the Depositor to perform its obligations under
this
Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization,
order,
registration or qualification of or with any court or governmental
agency
or body of
the United States or any other jurisdiction is required for the
issuance
of the Certificates, or the consummation by the Depositor of
the
other
transactions contemplated by this Agreement, except such
consents,
approvals,
authorizations, registrations or qualifications as (a) may be
required
under State securities or Blue Sky laws, (b) have been
previously
obtained
or (c) the failure of which to obtain would not have a material
adverse
effect on the performance by the Depositor of its obligations
under, or
the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending
before or,
to the Depositor's knowledge, threatened by any court,
administrative
agency or other tribunal to which the Depositor is a party
or of
which any of its properties is the subject: (a) which if
determined
adversely
to the Depositor would have a material adverse effect on the
business,
results of operations or financial condition of the Depositor;
(b)
asserting the invalidity of this Agreement or the Certificates;
(c)
seeking to
prevent the issuance of the Certificates or the consummation by
the
Depositor of any of the transactions contemplated by this
Agreement,
as the
case may be; (d) which might materially and adversely affect
the
performance by the Depositor of its obligations under, or the
validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated
Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans
and the delivery to it of the Mortgage Files, subject to the
provisions of
Sections 2.01 and 2.02, and the Trustee acknowledges the assignment
to it of all
other assets included in the Trust Fund, receipt of which is
hereby
acknowledged. Concurrently with such assignment and delivery and in
exchange
therefor, the Trustee, pursuant to the Written Order to
Authenticate executed by
an officer of the Depositor, has executed, and the Certificate
Registrar has
authenticated and delivered to or upon the order of the Depositor,
the
Certificates (other than the Class CE, Class P, Class R and Class
R-X
Certificates) in minimum dollar denominations or $25,000 and
integral dollar
multiples of $1 in excess. The Class CE and Class P Certificates
are issuable
only in minimum Percentage Interests of 10%. The Class R and Class
R-X
Certificates are each issuable only as a single certificate. The
Trustee
acknowledges the issuance of the uncertificated REMIC 1 Regular
Interests and
declares that it hold such regular interests as assets of REMIC 2.
The Trustee
acknowledges the obligation of the Class CE Certificates to pay Cap
Carryover
Amounts, and declares that it hold the same as assets of the
Grantor Trust on
behalf of the Holders of the Class A-1, Class A-2, Class A-3, Class
A-4, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7
Certificates, respectively, which shall be treated as beneficially
owning the
right to receive the Cap Carryover Amounts from the Grantor Trust.
In addition
to the assets described in the preceding sentence, the assets of
the Grantor
Trust shall also include (i) Prepayment Charges, any Originator
Prepayment
Charge Payment Amounts, any Servicer Prepayment Charge Payment
Amounts and the
beneficial interest of the Class P Certificates with respect
thereto and (ii)
the Yield Maintenance Agreements, the Reserve Accounts and the
beneficial
interest of the Class CE Certificates with respect thereto, subject
to the
obligation to pay Cap Carryover Amounts. The interests evidenced by
the
Certificates constitute the entire beneficial ownership interest in
the Trust
Fund.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service
and
administer the Mortgage Loans in accordance with this Agreement and
the normal
and usual standards of practice of prudent mortgage servicers
servicing similar
mortgage loans and, to the extent consistent with such terms, in
the same manner
in which it services and administers similar mortgage loans for its
own
portfolio, and shall have full power and authority, acting alone,
to do or cause
to be done any and all things in connection with such servicing
and
administration which the Servicer may deem necessary or desirable
and consistent
with the terms of this Agreement (the "Servicing Standard").
Consistent with the terms of this Agreement, the Servicer may
waive,
modify or vary any term of any Mortgage Loan or consent to the
postponement of
strict compliance with any such term or in any manner grant
indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination
such waiver,
modification, postponement or indulgence is not materially adverse
to the
Certificateholders; provided, however, that the Servicer shall not
make future
advances and, except as set forth in the following sentence or
Section 3.03, the
Servicer shall not permit any modification with respect to any
Mortgage Loan
that would (i) change the Mortgage Interest Rate, defer or forgive
the payment
thereof of any principal or interest payments, reduce the
outstanding principal
amount (except for actual payments of principal) or extend the
final maturity
date with respect to such Mortgage Loan, (ii) affect adversely the
status of any
REMIC constituting part of the Trust Fund as a REMIC or (iii) cause
any such
REMIC to be subject to a tax on "prohibited transactions" or
"contributions"
pursuant to the REMIC Provisions. In the event that the Mortgagor
is in default
with respect to the Mortgage Loan or such default is, in the
judgment of the
Servicer, reasonably foreseeable, the Servicer may permit a
modification of such
Mortgage Loan to reduce the Principal Balance thereof and/or extend
the term,
but not beyond the latest maturity date of any other Mortgage
Loan.
Notwithstanding the foregoing, the Servicer shall not permit any
modification
with respect to any Mortgage Loan that would both (x) effect an
exchange or
reissuance of such Mortgage Loan under Section 1.860G-2(b) of the
Treasury
Regulations and (y) cause any REMIC constituting part of the Trust
Fund to fail
to qualify as a REMIC under the Code or the imposition of any tax
on "prohibited
transactions" or "contributions" after the Startup Day under the
REMIC
Provisions. The NIMS Insurer's prior written consent shall be
required for any
modification, waiver or amendment if the aggregate number of
outstanding
Mortgage Loans which have been modified, waived or amended exceeds
5% of the
number of Mortgage Loans as of the Cut-off Date. Without limiting
the generality
of the foregoing, the Servicer shall continue, and is hereby
authorized and
empowered to execute and deliver on behalf of itself, and the
Trustee, all
instruments of satisfaction or cancellation, or of partial or full
release,
discharge and all other comparable instruments, with respect to the
Mortgage
Loans and with respect to the Mortgaged Property. The Servicer
shall make all
required Servicing Advances and shall service and administer the
Mortgage Loans
in accordance with Applicable Regulations, and shall provide to the
Mortgagor
any reports required to be provided to them thereby. The Trustee
shall execute
and deliver to the Servicer within at least fifteen (15) Business
Day of
receipt, upon request, any powers of attorney furnished to it by
the Servicer
empowering the Servicer to execute and deliver instruments of
satisfaction or
cancellation, or of partial or full release or discharge, and to
foreclose upon
or otherwise liquidate any Mortgaged Property, and to appeal,
prosecute or
defend in any court action relating to the Mortgage Loans or the
Mortgaged
Properties, in accordance with this Agreement, and the Trustee
shall execute and
deliver such other documents as the Servicer may request, necessary
or
appropriate to enable the Servicer to service and administer the
Mortgage Loans
and carry out its duties hereunder, in each case in accordance with
Servicing
Standard (and the Trustee shall have no liability for misuse of any
such powers
of attorney by the Servicer). Notwithstanding anything contained
herein to the
contrary, the Servicer shall not without the Trustee's written
consent: (i)
initiate any action, suit or proceeding solely under the Trustee's
name without
indicating the Servicer's representative capacity or (ii) take any
action with
the intent to cause, and which results in, the Trustee being
registered to do
business in any state.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures including collection procedures and
exercise the same
care that it customarily employs and exercises in servicing and
administering
mortgage loans for its own account giving due consideration to
accepted mortgage
servicing practices of prudent lending institutions and the
Certificateholders'
reliance on the Servicer.
The Servicer shall give prompt notice to the Trustee of any
action,
of which the Servicer has actual knowledge, to (i) assert a claim
against the
Trust Fund or (ii) assert jurisdiction over the Trust Fund.
Notwithstanding anything in this Agreement to the contrary, in
the
event of a voluntary Principal Prepayment in full of a Mortgage
Loan, the
Servicer may not waive any Prepayment Charge or portion thereof
required by the
terms of the related Mortgage Note unless (i)(a) the Servicer
determines that
such waiver is standard and customary in servicing similar mortgage
loans, (b)
such waiver relates to a default or a reasonably foreseeable
default and (c)
would, in the reasonable judgment of the Servicer, maximize
recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account
the value of
such Prepayment Charge, or (ii) the enforceability thereof is
limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar
law relating
to creditors' rights generally or (2) due to acceleration in
connection with a
foreclosure or other involuntary payment. If the Servicer has
waived or does not
collect all or a portion of a Prepayment Charge relating to a
voluntary
Principal Prepayment in full due to any action or omission of the
Servicer,
other than as provided above, the Servicer shall, on the date on
which the
Principal Prepayment in full is remitted to the Trustee, deliver to
the Trustee
the Servicer Prepayment Charge Amount with respect to such Mortgage
Loan for
distribution in accordance with the terms of this Agreement.
In the event that a Prepayment Charge due with respect to any
Mortgage Loan is not timely received by the Servicer, the Servicer
shall use
commercially reasonable efforts to determine whether the Originator
is obligated
to pay a related Originator Prepayment Charge Payment Amount, and
if the
Servicer determines that a Originator Prepayment Charge Payment
Amount is due,
the Servicer shall promptly notify the Originator, and the Servicer
shall
enforce the Originator's obligations to pay in a timely manner any
such
Originator Prepayment Charge Payment Amounts and, to the extent
that such
amounts are received by the Servicer, shall cause such amounts to
be deposited
into the Collection Account within one Business Day of receipt.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and
interest
on all Mortgage Loans are paid in full or as long as the Mortgage
Loan remains
subject to this Agreement, the Servicer will diligently collect all
payments due
under each Mortgage Loan when the same shall become due and payable
and shall,
to the extent such procedures shall be consistent with this
Agreement and
Applicable Regulations, follow such collection procedures as it
follows with
respect to mortgage loans comparable to the Mortgage Loans and held
for its own
account. Further, the Servicer will take special care in
ascertaining and
estimating on escrowed Mortgage Loans annual ground rents, taxes,
assessments,
water rates, fire and hazard insurance premiums, mortgage insurance
premiums,
and all other charges that, as provided in the Mortgage, will
become due and
payable to that end that the installments payable by the Mortgagors
will be
sufficient to pay such charges as and when they become due and
payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Mortgage Loan is
not
paid when the same becomes due and payable, or in the event the
Mortgagor fails
to perform any other covenant or obligation under the Mortgage Loan
and such
failure continues beyond any applicable grace period, the Servicer
shall take
such action as it shall deem to be in the best interest of the
Certificateholders. With respect to any defaulted Mortgage Loan,
the Servicer
shall have the right to review the status of the related
forbearance plan and,
subject to the second paragraph of Section 3.01, may modify such
forbearance
plan; including extending the Mortgage Loan repayment date for a
period of one
year or reducing the Mortgage Interest Rate up to 50 basis
points.
In connection with a foreclosure or other conversion, the
Servicer
shall exercise such rights and powers vested in it hereunder and
use the same
degree of care and skill in its exercise as prudent mortgage
servicers would
exercise or use under the circumstances in the conduct of their own
affairs and
consistent with Applicable Regulations and the Servicing Standards,
including,
without limitation, advancing funds for the payment of taxes and
insurance
premiums.
Notwithstanding the foregoing provisions of this Section 3.03,
with
respect to any Mortgage Loan as to which the Servicer has received
actual notice
of, or has actual knowledge of, the presence of any toxic or
hazardous substance
on the related Mortgaged Property, the Servicer shall not either
(i) obtain
title to such Mortgaged Property as a result of or in lieu of
foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any
other action
with respect to, such Mortgaged Property if, as a result of any
such action, the
Trust would be considered to hold title to, to be a
mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the
meaning of
the Comprehensive Environmental Response, Compensation and
Liability Act of
1980, as amended from time to time, or any comparable law, unless
the Servicer
has received the prior written consent of the NIMS Insurer and has
received a
prudent report prepared by a Person who regularly conducts
environmental audits
using customary industry standards, that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic interest of
the Certificateholders to take such actions as are necessary to
bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged
Property
relating to the use, management or disposal of any hazardous
substances,
hazardous materials, hazardous wastes, or petroleum-based materials
for which
investigation, testing, monitoring, containment, clean-up or
remediation could
be required under any federal, state or local law or regulation, or
that if any
such materials are present for which such action could be required,
that it
would be in the best economic interest of the Certificateholders to
take such
actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the
Servicer's right
to be reimbursed therefor from the Collection Account as provided
in Section
3.05(iv).
If the Servicer determines, as described above, that it is in
the
best economic interest of the Certificateholders to take such
actions as are
necessary to bring any such Mortgaged Property into compliance with
applicable
environmental laws, or to take such action with respect to the
containment,
clean-up or remediation of hazardous substances, hazardous
materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged
Property, then
the Servicer shall take such action as it deems to be in the best
economic
interest of the Certificateholders. The cost of any such
compliance,
containment, clean-up or remediation shall be advanced by the
Servicer, subject
to the Servicer's right to be reimbursed therefor from the
Collection Account as
provided in Section 3.05.
Section 3.04 Collection Account, Distribution Account and
Reserve
Accounts.
(a) The Servicer shall segregate and hold all funds collected
and
received pursuant to each Mortgage Loan separate and apart from any
of its own
funds and general assets and shall establish and maintain one or
more Collection
Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit or cause to be deposited on a daily
basis
and in no event more than one Business Day after receipt thereof in
the clearing
account (which must be an Eligible Account) in which it customarily
deposits
payments and collections on mortgage loans in connection with its
mortgage loan
servicing activities, and shall thereafter deposit in the
Collection Account, in
no event more than one Business Day after deposit of such funds in
the clearing
account, and retain therein, the following payments and collections
received or
made by it after the Cut-off Date with respect to the Mortgage
Loans (other than
in respect of principal and interest due on or before the Cut-off
Date):
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted
to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all Liquidation Proceeds and any Subsequent Recoveries;
(iv) all Insurance Proceeds including amounts required to be
deposited
pursuant to Section 3.10, other than proceeds to be held in the
Escrow
Account and applied to the restoration or repair of the
Mortgaged
Property
or released to the Mortgagor in accordance with the Servicer's
normal
servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which
are not
released to the Mortgagor in accordance with the Servicer's
normal
servicing
procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Servicer in
connection
with any REO Property pursuant to Section 3.13;
(vii) all
Prepayment Charges collected by the Servicer in connection
with the
voluntary Principal Prepayment in full of any Mortgage Loan,
all
Originator
Prepayment Charge Payment Amounts paid by the Originator and
all
Servicer Prepayment Charge Payment Amounts required to be paid by
the
Servicer
pursuant to Section 3.01 in connection with any such Principal
Prepayment; and
(viii) all amounts required to be deposited by the Servicer
pursuant
to Section
2.03.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the
Servicer and the
Servicer shall be entitled to retain and withdraw such interest
from the
Collection Account pursuant to Section 3.05(v). The foregoing
requirements for
deposit from the Collection Account shall be exclusive, it being
understood and
agreed that, without limiting the generality of the foregoing,
payments in the
nature of late payment charges, bad check fees, prepayment charges
that are not
Prepayment Charges, Originator Prepayment Charge Payment Amounts or
Servicer
Prepayment Charge Payment Amounts, assumption fees and other
similar fees need
not be deposited by the Servicer in the Collection Account. Amounts
deposited in
the Collection Account in error may be withdrawn by the Servicer at
any time.
(b) On behalf of the Trust Fund, the Trustee shall establish
and
maintain one or more accounts (such account or accounts, the
"Distribution
Account"), held in trust for the benefit of the Certificateholders.
On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in
immediately
available funds for deposit in the Distribution Account by 1:00
p.m. New York
time on the Servicer Remittance Date, (i) that portion of the
Available Funds
(calculated without regard to the references in the definition
thereof to
amounts that may be deposited to the Distribution Account from a
different
source as provided herein) then on deposit in the Collection
Account, (ii) the
amount of all Prepayment Charges collected by the Servicer in
connection with
the voluntary Principal Prepayment in full of any of the Mortgage
Loans then on
deposit in the Collection Account (other than any such Prepayment
Charges
received after the related Prepayment Period) and (iii) any
Originator
Prepayment Charge Payment Amount or any Servicer Prepayment Charge
Payment
Amount. Amounts in the Distribution Account shall be deemed to be
held on behalf
of the related REMICs and the Grantor Trust in accordance with the
REMIC
distributions set forth in Section 4.08. The Trustee shall be
entitled to
withdraw from the Distribution Account any amounts owing to it
pursuant to
Section 8.05 and Section 9.01(c) prior to the distribution of any
amounts on
deposit to the Certificateholders; provided, however, in the case
of amounts
owing to it other than the Trustee Fee, the Trustee shall provide
the Depositor,
the NIMS Insurer and the Servicer with a written account of such
amounts five
Business Days prior to withdrawing such funds. In connection with
any failure by
the Servicer to make any remittance required to be made by the
Servicer to the
Trustee for deposit in the Distribution Account on the day and by
the time such
remittance is required to be made under the terms of this Section
3.04(b)
(without giving effect to any grace or cure period), the Servicer
shall pay to
the Trustee for the account of the Trustee interest at the prime
rate of United
States money center commercial banks as published in The Wall
Street Journal on
any amount not timely remitted from and including the day such
remittance was
required to be made to, but not including, the day on which such
remittance was
actually made.
(c) Funds in the Collection Account and the Distribution Account
may
be invested in Eligible Investments in accordance with the
provisions set forth
in Section 3.25. The Servicer shall give notice to the Trustee and
the NIMS
Insurer of the location of the Collection Account maintained by it
when
established and prior to any change thereof. The Trustee shall give
notice to
the Servicer, the NIMS Insurer and the Depositor of the location of
the
Distribution Account when established and prior to any change
thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be
deposited
therein, it may at any time request that the Trustee withdraw such
amount from
the Distribution Account and remit to the Servicer any such amount,
any
provision herein to the contrary notwithstanding. In addition, the
Servicer
shall deliver to the Trustee from time to time for deposit, and the
Trustee
shall so deposit, in the Distribution Account in respect of REMIC
1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy
court having jurisdiction in such matters;
(iii) any amounts required to be delivered by the Servicer to
the
Trustee
for deposit in the Distribution Account pursuant to Sections
2.03,
3.04,
3.13, 3.15, 3.16, 3.23, 3.24, 4.07 or 10.01; and
(iv) any amounts required to be deposited by the Servicer
pursuant
to Section
3.11 in connection with the deductible clause in any blanket
hazard
insurance policy, such deposit being made from the Servicer's
own
funds,
without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source,
the Trustee shall notify the Servicer of such receipt and deposit
such funds in
the Distribution Account, subject to withdrawal thereof as
permitted hereunder.
In addition, the Trustee shall deposit in the Distribution Account
any amounts
required to be deposited pursuant to Section 3.25(b) in connection
with losses
realized on Eligible Investments with respect to funds held in the
Distribution
Account.
(f) Any Prepayment Charges, Originator Prepayment Charge
Payment
Amounts and Servicer Prepayment Charge Payment Amounts deposited
pursuant to
Section 3.04(a)(vii) shall not be assets of any REMIC created
hereunder, but
shall be considered assets of the Grantor Trust held by the Trustee
for the
benefit of the Class P Certificateholders.
(g) (i) The Trustee shall establish and maintain the Class A-1
Reserve Account, held in trust for the benefit of the Holders of
the Class A-1
Certificates. The Trustee shall deposit in the Class A-1 Reserve
Account on the
date received by it, any Class A-1 Yield Maintenance Agreement
Payment received
from the Class A-1 Yield Maintenance Agreement Provider for the
related
Distribution Date. The Trustee shall establish and maintain the
Group 2-A
Reserve Account, held in trust for the benefit of the Holders of
the Class A-2,
Class A-3 and Class A-4 Certificates. The Trustee shall deposit in
the Group 2-A
Reserve Account on the date received by it, any Group 2-A Yield
Maintenance
Agreement Payment received from the Group 2-A Yield Maintenance
Agreement
Provider for the related Distribution Date. The Trustee shall
establish and
maintain the Class M Reserve Account, held in trust for the benefit
of the
Holders of the Class M Certificates. The Trustee shall deposit in
the Class M
Reserve Account on the date received by it, any Class M Yield
Maintenance
Agreement Payment received from the Class M Yield Maintenance
Agreement Provider
for the related Distribution Date. On each Distribution Date, the
Trustee shall
withdraw from the Class A-1 Reserve Account any Class A-1 Yield
Maintenance
Agreement Payment, shall withdraw from the Group 2-A Reserve
Account any Group
2-A Yield Maintenance Agreement Payment and shall withdraw from the
Class M
Reserve Account any Class M Yield Maintenance Agreement Payment and
apply them
in the following order of priority:
(A) to the Class A-1 Certificates from the Class A-1 Reserve
Account, any remaining unpaid Cap Carryover Amount for such
Class
for such Distribution Date (after distributions to the Class
A-1
Certificates pursuant to Section 4.02(b) hereof);
(B) concurrently, to the Class A-2, Class A-3 and Class A-4
Certificates from the Group 2-A Reserve Account, pro rata in
accordance with their Certificate Principal Balances
immediately
prior to the Distribution Date, any remaining unpaid Cap
Carryover
Amounts for such Classes for such Distribution Date (after
distributions to the Class A-2, Class A-3 and Class A-4
Certificates
pursuant to Section 4.02(b) hereof);
(C) to the Class M Certificates from the Class M Reserve
Account, in each case only up to the Class M Cap Amount for the
related Class, any remaining unpaid Cap Carryover Amounts for
such
Classes for such Distribution Date (after distributions to the
Class
M Certificates pursuant to Section 4.02(b) hereof), distributed
sequentially, to the Class M-1, Class M-2, Class M-3, Class
M-4,
Class M-5, Class M-6 and Class M-7 Certificates;
(D) concurrently, to the Class A-2, Class A-3 and Class A-4
Certificates, from the Group 2-A Reserve Account, pro rata in
accordance with the remaining unpaid Cap Carryover Amounts for
such
Classes for such Distribution Date, any remaining unpaid Cap
Carryover Amounts for such Classes for such Distribution Date
(after
distributions to the Class A-2, Class A-3 and Class A-4
Certificates
pursuant to Section 4.02(b) hereof and clause (B) above);
(E) to the Class M Certificates from the Class M Reserve
Account, any remaining unpaid Cap Carryover Amounts without
regard
to the Class M Cap Amount for such Classes for such
Distribution
Date (after distributions pursuant to Section 4.02(b) hereof
and
clause (C) above) distributed sequentially, to the Class M-1,
Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates; and
(F) to the Class CE Certificates, any remaining amounts on
deposit in the Reserve Accounts.
(ii) The Trustee shall account for each Reserve Account as an
asset
of a
grantor trust under subpart E, part I of subchapter J of the Code
and
not an
asset of any REMIC created pursuant to this Agreement. The
beneficial
owner of each Reserve Account is the Class CE
Certificateholder. For all federal tax purposes, amounts
transferred or
reimbursed
by REMIC 2 to any Reserve Account shall be treated as
distributions by the Trustee to the Class CE Certificateholder.
(iii) Any Cap Carryover Amounts paid by the Trustee pursuant to
this
Section
3.04(g) to the Offered Certificates and the Class M-7
Certificates
shall be
accounted for by the Trustee as amounts paid first to the Class
CE
Certificates and then to the respective Class or Classes of
Offered
Certificates and the Class M-7 Certificates from the Grantor Trust.
In
addition,
the Trustee shall account for the Offered Certificates' and the
Class M-7
Certificates' rights to receive payments of Cap Carryover
Amounts as
rights in limited recourse interest rate cap contracts written
by the
Class CE Certificates in favor of each Class of Offered
Certificates and the Class M-7 Certificates.
(iv) For federal tax return and information reporting, the right
of
the
Holders of the Offered Certificates and the Class M-7 Certificates
to
receive
payments under the Class A-1 Yield Maintenance Agreement, Group
2-A Yield
Maintenance Agreement and Class M Yield Maintenance Agreement
in
respect of
any related Yield Maintenance Agreement Payments shall be
assigned a
value of zero.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Servicer may, from time to time, withdraw from the
Collection
Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution
Account
the
amounts required to be so remitted pursuant to Section 3.04(b)
or
permitted
to be so remitted pursuant to the first sentence of Section
3.04(d);
(ii) to reimburse itself for (a) any unreimbursed Advances to
the
extent of
amounts received which represent Late Collections (net of the
related
Servicing Fees) of Monthly Payments, Liquidation Proceeds and
Insurance
Proceeds on Mortgage Loans with respect to which such Advances
were made
in accordance with the provisions of Section 4.07; (b) any
unreimbursed Advances with respect to the final liquidation of a
Mortgage
Loan that
are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received
with
respect to
such Mortgage Loan are insufficient to reimburse the Servicer
for such
unreimbursed Advances; or (c) subject to Section 4.07(b), any
unreimbursed Advances to the extent of funds held in the
Collection
Account
for future distribution that were not included in Available
Funds
for the
preceding Distribution Date;
(iii) to reimburse itself for (a) any unpaid Servicing Fees, (b)
any
unreimbursed Servicing Advances with respect to each Mortgage Loan,
but
only to
the extent of any Late Collections, Liquidation Proceeds,
Insurance
Proceeds and condemnation proceeds received with respect to
such
Mortgage
Loan, and (c) any Servicing Advances with respect to the final
liquidation of a Mortgage Loan that are Nonrecoverable Advances,
but only
to the
extent that Late Collections, Liquidation Proceeds and
Insurance
Proceeds
received with respect to such Mortgage Loan are insufficient to
reimburse
the Servicer for Servicing Advances;
(iv) to reimburse itself for any amounts paid or expenses
incurred
pursuant
to Section 3.03 (and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on
funds in the Collection Account (all such interest to be
withdrawn
monthly not later than each Servicer Remittance Date), (b) the
Servicing
Fee from that portion of any payment or recovery as to interest
to a
particular Mortgage Loan to the extent not retained pursuant to
Section
3.04(a)(ii) and (c) any Prepayment Interest Excess;
(vi) to pay or reimburse itself for any amounts payable or paid
pursuant
to Section 6.03 (and not otherwise previously reimbursed); and
(vii) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit
in the
Collection Account any amount not required to be deposited therein,
it may at
any time withdraw such amount from the Collection Account, any
provision herein
to the contrary notwithstanding.
Section 3.06 Establishment of Escrow Accounts; Deposits in
Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow
Payments
separate and apart from any of its own funds and general assets and
shall
establish and maintain one or more Escrow Accounts, in the form of
time deposit
or demand accounts. A copy of such letter agreement shall be
furnished to the
Trustee upon request. The Escrow Account shall be an Eligible
Account.
The Servicer shall deposit or cause to be deposited on a daily
basis
and in no event more than one Business Day after receipt thereof in
the clearing
account (which must be an Eligible Account) in which it customarily
deposits
payments and collections on mortgage loans in connection with its
mortgage loan
servicing activities, and shall thereafter deposit in the Escrow
Account or
Accounts, in no event more than one Business Day after deposit of
such funds in
the clearing account, and retain therein, (i) all Escrow Payments
collected on
account of the Mortgage Loans, for the purpose of effecting timely
payment of
any such items as required under the terms of this Agreement, and
(ii) all
Insurance Proceeds which are to be applied to the restoration or
repair of any
Mortgaged Property. The Servicer shall make withdrawals therefrom
only to effect
such payments as are required under this Agreement, and for such
other purposes
as shall be set forth in, or in accordance with, Section 3.07. The
Servicer
shall be entitled to retain any interest paid on funds deposited in
the Escrow
Account by the depository institution other than interest on
escrowed funds
required by law to be paid to the Mortgagor and, to the extent
required by the
related Mortgage Loan or Applicable Regulations, the Servicer shall
pay interest
on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is
non-interest bearing or that interest paid thereon is insufficient
for such
purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer
(i)
to effect timely payments of ground rents, taxes, assessments,
water rates,
fire, flood and hazard insurance premiums and comparable items in a
manner and
at a time that assures that the lien priority of the Mortgage is
not jeopardized
(or, with respect to the payment of taxes, in a manner and at a
time that avoids
the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a
result of a tax lien), (ii) to reimburse the Servicer for any
Servicing Advance
made by the Servicer with respect to a related Mortgage Loan but
only from
amounts received on the related Mortgage Loan which represent late
payments or
Late Collections of Escrow Payments thereunder with respect to
taxes and
assessments and with respect to hazard insurance, (iii) to refund
to the
Mortgagor any funds as may be determined to be overages, (iv) for
transfer to
the Collection Account in accordance with the terms of this
Agreement, (v) for
application to restoration or repair of the Mortgaged Property,
(vi) to pay to
the Servicer, or to the Mortgagor to the extent required by the
related Mortgage
Loan or Applicable Regulations, any interest paid on the funds
deposited in the
Escrow Account, (vii) to clear and terminate the Escrow Account on
the
termination of this Agreement, or (viii) to transfer to the
Collection Account
any insurance proceeds. As part of its servicing duties, the
Servicer shall pay
to the Mortgagor interest on funds in the Escrow Account, to the
extent required
by the related Mortgage Loan or Applicable Regulations, and to the
extent that
interest earned on funds in the Escrow Account is insufficient,
shall pay such
interest from its own funds, without any reimbursement
therefor.
In the event the Servicer shall deposit in the Escrow Account
any
amount not required to be deposited therein, it may at any time
withdraw such
amount from the Escrow Account, any provision herein to the
contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each Mortgage Loan that provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting
the status of
ground rents, taxes, assessments, water rates and other charges
which are or may
become a lien upon the Mortgaged Property and the status of fire,
flood and
hazard insurance coverage and shall obtain, from time to time, all
bills for the
payment of such charges (including renewal premiums) and shall
effect payment of
taxes, assessments, hazard insurance premiums, and comparable items
in a manner
and at a time that assures that the lien priority of the Mortgage
is not
jeopardized (or, with respect to the payment of taxes, in a manner
and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or
the
foreclosure as a result of a tax lien). To the extent that the
Mortgage does not
provide for Escrow Payments, the Servicer shall use its best
efforts to
determine that any such payments are made by the Mortgagor at the
time they
first become due. If any such payment has not been made, the
Servicer will
advance or cause to be advanced funds necessary to avoid the lapse
of insurance
coverage on the Mortgaged Property and to assure that no Mortgaged
Property is
lost to a tax sale or foreclosure as a result of a tax lien.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account and the Escrow
Account to a different depository institution from time to time.
Upon such
transfer, the Servicer shall deliver to the Trustee, the NIMS
Insurer and the
Depositor, a certification or letter agreement, as the case may be,
as required
pursuant to Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage
Loan
fire and hazard insurance with extended coverage as is customary in
the area
where the Mortgaged Property is located in an amount which is at
least equal to
the lesser of (i) the amount necessary to fully compensate for any
damage or
loss to the improvements which are a part of such property on a
replacement cost
basis or (ii) the Principal Balance of the Mortgage Loan, in each
case in an
amount not less than such amount as is necessary to prevent the
Mortgagor and/or
the Mortgagee from becoming a co-insurer. If the Mortgaged Property
is in an
area identified in the Federal Register by the Flood Emergency
Management Agency
as having special flood hazards and flood insurance has been made
available, the
Servicer will cause to be maintained a flood insurance policy
meeting the
requirements of the current guidelines of the Federal Insurance
Administration
with a generally acceptable insurance carrier, in an amount
representing
coverage not less than the least of (i) the Principal Balance of
the Mortgage
Loan, (ii) the maximum insurable value of the improvements securing
such
Mortgage Loan or (iii) the maximum amount of insurance which is
available under
the National Flood Insurance Act of 1968, as amended. The Servicer
shall also
maintain on the REO Property for the benefit of the
Certificateholders, (x) fire
and hazard insurance with extended coverage in an amount which is
at least equal
to the lesser of (i) 100% of the maximum insurable value of the
improvements
securing the Mortgage Loan and (ii) the outstanding Principal
Balance of the
Mortgage Loan at the time it became an REO Property, (y) public
liability
insurance and, (z) to the extent required and available under the
National Flood
Insurance Act of 1968, as amended, flood insurance in an amount as
provided
above. Any amounts collected by the Servicer under any such
policies other than
amounts to be deposited in the Escrow Account and applied to the
restoration or
repair of the Mortgaged Property or REO Property, or released to
the Mortgagor
in accordance with the Servicer's normal servicing procedures,
shall be
deposited in the Collection Account, subject to withdrawal pursuant
to Section
3.05. It is understood and agreed that no earthquake or other
additional
insurance is required to be maintained by the Servicer or the
Mortgagor or
maintained on property acquired in respect of the Mortgage Loan,
other than
pursuant to such Applicable Regulations as shall at any time be in
force and as
shall require such additional insurance. All such policies shall be
endorsed
with standard mortgagee clauses with loss payable to the Servicer
and shall
provide for at least thirty days prior written notice of any
cancellation,
reduction in the amount of or material change in coverage to the
Servicer. The
Servicer shall not interfere with the Mortgagor's freedom of choice
in selecting
either his insurance carrier or agent, provided, however, that the
Servicer
shall not accept any such insurance policies from insurance
companies unless
such companies currently reflect a general policy rating of B:III
or better in
Best's Key Rating Guide and are licensed to do business in the
state wherein the
property subject to the policy is located.
Section 3.11 Maintenance of Mortgage Impairment Insurance
Policy.
In the event that the Servicer shall obtain and maintain a
blanket
policy issued by an insurer that has a general policy rating of
B:III or better
in Best's Key Rating Guide insuring against hazard losses on all of
the Mortgage
Loans, then, to the extent such policy provides coverage in an
amount equal to
the amount required pursuant to Section 3.10 and otherwise complies
with all
other requirements of Section 3.10, it shall conclusively be deemed
to have
satisfied its obligations as set forth in Section 3.10, it being
understood and
agreed that such policy may contain a deductible clause, in which
case the
Servicer shall, in the event that there shall not have been
maintained on the
related Mortgaged Property or REO Property a policy complying with
Section 3.10,
and there shall have been a loss which would have been covered by
such policy,
deliver to the Trustee for deposit in the Distribution Account the
amount not
otherwise payable under the blanket policy because of such
deductible clause,
which amount shall not be reimbursable to the Servicer from the
Trust Fund. In
connection with its activities as servicer of the Mortgage Loans,
the Servicer
agrees to prepare and present, on behalf of the Trustee, claims
under any such
blanket policy in a timely fashion in accordance with the terms of
such policy.
Upon request of the Trustee, the Servicer shall cause to be
delivered to the
Trustee a certified true copy of such policy and a statement from
the insurer
thereunder that such policy shall in no event be terminated or
materially
modified without thirty days prior written notice to the
Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The
Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance
policy, with
broad coverage with financially responsible companies on all
officers, employees
or other persons acting in any capacity with regard to the Mortgage
Loans to
handle funds, money, documents and papers relating to the Mortgage
Loans. The
Fidelity Bond and errors and omissions insurance shall be in the
form of the
Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and
omissions and
negligent acts of such persons. Such Fidelity Bond shall also
protect and insure
the Servicer against losses in connection with the failure to
maintain any
insurance policies required pursuant to this Agreement and the
release or
satisfaction of a Mortgage Loan without having obtained payment in
full of the
indebtedness secured thereby. No provision of this Section 3.12
requiring the
Fidelity Bond and errors and omissions insurance shall diminish or
relieve the
Servicer from its duties and obligations as set forth in this
Agreement. The
minimum coverage under any such bond and insurance policy shall be
at least
equal to the corresponding amounts required by Fannie Mae in the
Fannie Mae MBS
Selling and Servicing Guide or by Freddie Mac in the Freddie Mac
Servicer's
Guide. Upon request of the Trustee or the NIMS Insurer, the
Servicer shall cause
to be delivered to the requesting party a certified true copy of
the Fidelity
Bond and errors and omissions insurance policy and a statement from
the surety
and the insurer that such Fidelity Bond and errors and omissions
insurance
policy shall in no event be terminated or materially modified
without thirty
days' prior written notice to the Trustee.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired
in
foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale
shall be taken (pursuant to a limited power of attorney to be
provided by the
Trustee to the Servicer) in the name of the Trustee or its nominee,
on behalf of
the Certificateholders, or in the event the Trustee is not
authorized or
permitted to hold title to real property in the state where the REO
Property is
located, or would be adversely affected under the "doing business"
or tax laws
of such state by so holding title, the deed or certificate of sale
shall be
taken in the name of such Person or Persons as shall be consistent
with an
Opinion of Counsel obtained by the Servicer from an attorney duly
licensed to
practice law in the state where the REO Property is located. Any
Person or
Persons holding such title other than the Trustee shall acknowledge
in writing
that such title is being held as nominee for the benefit of the
Trustee.
(b) In the event that the Trust Fund acquires any REO Property
as
aforesaid or otherwise in connection with a default or imminent
default on a
Mortgage Loan, the Servicer shall dispose of such REO Property
before the end of
the third taxable year beginning after the year of its acquisition
by the Trust
Fund for purposes of Section 860G(a)(8) of the Code unless the
Servicer has
received a grant of extension from the Internal Revenue Service of
the
above-mentioned grace period such that the holding by the Trust
Fund of such REO
Property subsequent to such period will not: (i) result in the
imposition of any
tax on "prohibited transactions" as defined in Section 860F of the
Code; or (ii)
cause any REMIC constituting any part of the Trust Fund to fail to
qualify as a
REMIC at any time that any Certificates (other than the Class P
Certificates)
are outstanding, in which case the Trust Fund may continue to hold
such REO
Property.
Subject to compliance with applicable laws and regulations as
shall
at any time be in force, and notwithstanding any other provisions
of this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or
allowed to continue to be rented) or otherwise used by or on behalf
of the Trust
Fund in such a manner or pursuant to any terms that would: (i)
cause such REO
Property to fail to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code; or (ii) subject any REMIC
constituting part of
the Trust Fund to the imposition of any federal income taxes on the
income
earned from such REO Property, including any taxes imposed by
reason of Sections
860F or 860G(c) of the Code, unless the Servicer has agreed to
indemnify and
hold harmless the Trust Fund with respect to the imposition of any
such taxes.
The Servicer shall manage, conserve, protect and operate each
REO
Property for the Certificateholders and the Trust Fund solely for
the purpose of
its prompt disposition and sale in a manner which does not cause
such REO
Property to fail to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code or result in the receipt by the
related REMIC of
any "income from non-permitted assets" within the meaning of
Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure
property" which
is subject to taxation under the REMIC Provisions. The Servicer
shall cause each
REO Property to be inspected promptly upon the acquisition of title
thereto and
shall cause each REO Property to be inspected at least annually
thereafter. The
Servicer shall make or cause to be made a written or electronic
report of each
such inspection. Such reports shall be retained in the Mortgage
File and copies
thereof shall be forwarded by the Servicer to the Trustee upon
request. The
Servicer shall attempt to sell the same (and may temporarily rent
the same) on
such terms and conditions as the Servicer deems to be in the best
interest of
the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds
collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within one Business Day of receipt, in the Collection
Account, all
revenues received with respect to each REO Property and shall
withdraw therefrom
funds necessary for the proper operation, management and
maintenance of the
related REO Property, including the cost of maintaining any hazard
insurance
pursuant to Section 3.10 hereof and the fees of any managing agent
acting on
behalf of the Servicer.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property
covering the
operation of each REO Property for the previous month. Such
operating statement
shall be accompanied by such other information as the Trustee shall
reasonably
request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting
the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at
such
price and upon such terms and conditions as the Servicer deems to
be in the best
interest of the Certificateholders. If as of the date title to any
REO Property
was acquired by the Servicer there were outstanding unreimbursed
Servicing
Advances, Servicing Fees and Advances with respect to the REO
Property, the
Servicer, upon an REO Disposition of such REO Property, shall be
entitled to
reimbursement for any related unreimbursed Servicing Advances,
Servicing Fees
and Advances from proceeds received in connection with such REO
Disposition. The
proceeds from the REO Disposition, net of any payment to the
Servicer as
provided above, shall be deposited in the Collection Account for
transfer to the
Distribution Account on the succeeding Servicer Remittance Date in
accordance
with Section 3.04(a)(vi).
Any REO Disposition shall be for cash only (unless changes in
the
REMIC Provisions made subsequent to the Startup Day allow a sale
for other
consideration and an Opinion of Counsel is obtained by the Servicer
to the
effect that such sale shall not cause any REMIC constituting part
of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by
the
Mortgagor, the Servicer shall, to the extent it has knowledge of
such conveyance
or prospective conveyance, exercise its rights to accelerate the
maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in
the related
Mortgage or Mortgage Note; provided, however, that the Servicer
shall not
exercise any such right if the "due-on-sale" clause, in the
reasonable belief of
the Servicer, is not enforceable under applicable law. In such
event, the
Servicer shall make reasonable efforts to enter into an assumption
and
modification agreement with the Person to whom such property has
been or is
about to be conveyed, pursuant to which such Person becomes liable
under the
Mortgage Note and, unless prohibited by applicable law or the
Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted
under
applicable law, the Servicer is authorized to enter into a
substitution of
liability agreement with such Person, pursuant to which the
original Mortgagor
is released from liability and such Person is substituted as
Mortgagor and
becomes liable under the Note; provided that no such substitution
will be
permitted unless such person satisfies the underwriting criteria of
the Servicer
and has a credit score at least equal to that of the original
Mortgagor. The
Mortgage Loan, as assumed, shall conform in all respects to the
requirements,
representations and warranties of this Agreement. The Servicer
shall not take or
enter into any assumption and modification agreement, however,
unless (to the
extent practicable under the circumstances) it shall have received
confirmation,
in writing, of the continued effectiveness of any applicable hazard
insurance
policy. The Servicer shall notify the Trustee that any such
assumption or
substitution agreement has been completed by forwarding to the
Trustee the
original copy of such assumption or substitution agreement
(indicating the
Mortgage File to which it relates) which copy shall be added by the
Trustee to
the related Mortgage File and which shall, for all purposes, be
considered a
part of such Mortgage File to the same extent as all other
documents and
instruments constituting a part thereof. The Servicer shall be
responsible for
recording any such assumption or substitution agreements. In
connection with any
such assumption or substitution agreement, the Monthly Payment on
the related
Mortgage Loan shall not be changed but shall remain as in effect
immediately
prior to the assumption or substitution, the stated maturity or
outstanding
principal amount of such Mortgage Loan shall not be changed nor
shall any
required monthly payments of principal or interest be deferred or
forgiven. Any
fee collected by the Servicer for consenting to any such conveyance
or entering
into an assumption or substitution agreement shall be retained by
or paid to the
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision
of
this Agreement, the Servicer shall not be deemed to be in default,
breach or any
other violation of its obligations hereunder by reason of any
assumption of a
Mortgage Loan by operation of law or any assumption which the
Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.15 Notification of Adjustments.
On each Adjustment Date, the Servicer shall make Mortgage
Interest
Rate adjustments for each Adjustable-Rate Mortgage Loan in
compliance with the
requirements of the related Mortgage and Mortgage Note and
Applicable
Regulations. The Servicer shall execute and deliver the notices
required by each
Mortgage and Mortgage Note and Applicable Regulations regarding
Mortgage
Interest Rate adjustments. Upon the discovery by the Servicer or
the Trustee
that the Servicer has failed to adjust or has incorrectly adjusted
a Mortgage
Interest Rate or a Monthly Payment pursuant to the terms of the
related Mortgage
Note and Mortgage, the Servicer shall deliver to the Trustee for
deposit in the
Distribution Account from its own funds the amount of any interest
loss caused
thereby without reimbursement therefor; provided, however, the
Servicer shall be
held harmless with respect to any Mortgage Interest Rate
adjustments made by any
servicer prior to the Servicer.
Section 3.16 Use of Subcontractors and Subservicers.
To the extent the Servicer engages any Subcontractor or
Subservicer
in connection with the performance of any of its duties under this
Agreement,
the Servicer shall immediately notify the Depositor and the Trustee
in writing
of such engagement and shall provide a written description (in form
and
substance satisfactory to the Depositor) of the role and function
of such
Subcontractor or Subservicer. To the extent the Depositor notifies
the Servicer
and the Trustee that it has determined that any such Subcontractor
or
Subservicer is a Servicing Function Participant, the Servicer shall
cause such
Servicing Function Participant to prepare a separate assessment and
attestation
report, as contemplated by Section 3.20 of this Agreement and
deliver such
report to the Trustee as set forth in Section 3.31 of this
Agreement. In
addition, to the extent the Depositor notifies the Servicer and the
Trustee that
it has determined that any such Servicing Function Participant
would be a
"servicer" within the meaning of Item 1101 of Regulation AB and
meets the
criteria in Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB (an
"Additional
Servicer"), the Servicer shall cause such Additional Servicer (i)
to prepare a
separate compliance statement as contemplated by Section 3.19 of
this Agreement
and deliver such statement to the Trustee as set forth in Section
3.31 of this
Agreement and (ii) to provide the Depositor and the Trustee the
information
required by Item 1108(b) and 1108(c) of Regulation AB (including,
without
limitation, a copy of any Subservicing Agreement) within two
Business Days
following such engagement such that the Trustee, pursuant to
Section 3.31(d),
may accurately and timely report such event under Item 6.02 of Form
8-K pursuant
to the Exchange Act (if the Trust's Exchange Act reporting
requirements have not
been suspended pursuant to Section 15(d) of the Exchange Act as set
forth in
3.31(g)). To the extent the Servicer terminates any such Additional
Servicer,
the Servicer shall provide the Depositor and the Trustee the
information
required to enable the Trustee to accurately and timely report such
event under
Item 6.02 of Form 8-K (if the Trust's Exchange Act reporting
requirements have
not been suspended pursuant to Section 15(d) of the Exchange Act as
set forth in
3.31(g)).
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including
any
liquidation of such Mortgage Loan through foreclosure or otherwise,
or the
receipt by the Servicer of a notification that payment in full will
be escrowed
in a manner customary for such purposes), the Servicer shall
deliver to the
Trustee, in written form (with two executed copies) or electronic
form, of a
completed "Request for Release" in the form of Exhibit E. Upon
receipt of such
Request for Release of Documents, the Trustee shall promptly
release the related
Mortgage File within three (3) Business Days via overnight mail
delivery (at the
expense of the Servicer), in trust, to (i) the Servicer, or (ii)
such other
party identified in the related Request for Release. The Trustee
agrees to
indemnify the Servicer, out of its own funds, for any loss,
liability or expense
(other than special, indirect, punitive or consequential damages
which will not
be paid by the Trustee) incurred by the Servicer as a direct result
of the
negligence or willful misconduct by the Trustee in releasing the
Mortgage File
as provided above. Upon any such payment in full, or the receipt of
such
notification that such funds have been placed in escrow, the
Trustee hereby
authorizes and empowers the Servicer to execute an instrument of
satisfaction
(or assignment of Mortgage without recourse) regarding the
Mortgaged Property
relating to such Mortgage, which instrument of satisfaction or
assignment shall
be delivered to the Person or Persons entitled thereto against
receipt therefor
of payment in full, it being understood and agreed that no expense
incurred in
connection with such instrument of satisfaction or assignment, as
the case may
be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate in the servicing of
any
Mortgage Loan, including, without limitation, foreclosure or other
comparable
conversion of a Mortgage Loan or collection under any insurance
policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the
payment or
liquidation pursuant to which the related Mortgage File is released
to an escrow
agent or an employee, agent or attorney of the Trustee), upon
written request of
the Servicer and delivery to the Trustee, in written form (with two
executed
copies) or electronic form, of a "Request for Release" in the form
of Exhibit E
signed by a Servicing Officer, release the related Mortgage File to
the Servicer
within three (3) Business Days and shall execute such documents as
shall be
necessary to the prosecution of any such proceedings, including,
without
limitation, an assignment without recourse of the related Mortgage
to the
Servicer. Such receipt shall obligate the Servicer to return the
Mortgage File
to the Trustee when the need therefor by the Servicer no longer
exists unless
the Mortgage Loan shall be liquidated, in which case, upon receipt
of a Request
for Release evidencing such liquidation, the receipt shall be
released by the
Trustee to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right
to
accept applications of Mortgagors for consent to (i) partial
releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division
of properties
subject to Mortgages, (iv) modifications, and (v) second mortgage
subordination
agreements. No application for approval shall be considered by the
Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the
Trustee
(which opinion shall not be an expense of the Trustee or the Trust
Fund) that
such sale, disposition, substitution, acquisition or contribution
will not
affect adversely the status of any REMIC constituting part of the
Trust Fund as
a REMIC or cause any REMIC constituting part of the Trust Fund to
be subject to
a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC
Provisions; (x) the provisions of the related Note and Mortgage
have been
complied with; (y) the Combined Loan-to-Value Ratio and
debt-to-income ratio
after any release does not exceed the maximum Combined
Loan-to-Value Ratio and
debt-to-income ratio established in accordance with the
underwriting standards
of the Mortgage Loans; and (z) the lien priority of the related
Mortgage is not
affected. Upon receipt by the Trustee of a Servicing Officer's
certificate
setting forth the action proposed to be taken in respect of a
particular
Mortgage Loan and certifying that the criteria set forth in the
immediately
preceding sentence have been satisfied, the Trustee shall execute
and deliver to
the Servicer the consent or partial release so requested by the
Servicer. A
proposed form of consent or partial release, as the case may be,
shall accompany
any Servicing Officer's certificate delivered by the Servicer
pursuant to this
paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall
be
entitled to retain the amount of the Servicing Fee with respect to
each Mortgage
Loan (including REO Properties) and any Prepayment Interest Excess.
The Servicer
shall be entitled to retain additional servicing compensation in
the form of
release fees, bad check charges, assumption fees, modification or
extension
fees, late payment charges, prepayment charges that are not
Prepayment Charges,
Originator Prepayment Charge Payment Amounts or Servicer Prepayment
Charge
Payment Amounts, or any other service-related fees and similar
items, to the
extent collected from Mortgagors.
Section 3.19 Annual Statement as to Compliance.
The Trustee and the Servicer shall deliver, and the Servicer
shall
cause each Additional Servicer engaged by it to deliver, to the
Depositor, the
Trustee and each Rating Agency on or before March 5 of each year or
if such day
is not a Business Day, the next Business Day (with a 10 calendar
day cure
period, but in no event later than March 15), commencing in March
20 , a
certificate in the form required by Item 1123 of Regulation AB, to
the effect
that (i) an authorized officer of the Trustee, the Servicer or the
Additional
Servicer, as the case may be, has reviewed (or a review has been
made under his
or her supervision of) such party's activities under this
Agreement, or such
other applicable agreement in the case of an Additional Servicer,
during the
prior calendar year or portion thereof and (ii) to the best of such
officer's
knowledge, based on such review, such party has fulfilled all of
its obligations
under this Agreement, or such other applicable agreement in the
case of an
Additional Servicer, in all material respects throughout the prior
calendar year
or portion thereof or, if there has been a failure to fulfill any
such
obligation in any material respect, specifying each such failure
known to such
officer and the nature and status thereof. Promptly after receipt
of each such
certificate, the Depositor shall review such certificate and, if
applicable,
consult with the Servicer and the Trustee as to the nature of any
failure to
fulfill any obligation under the Agreement, or such other
applicable agreement
in the case of an Additional Servicer, in any material respect.
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Each of the Servicer and the Trustee, at its own expense,
shall
furnish, and shall cause any Servicing Function Participant engaged
by it to
furnish, at such party's expense, to the Trustee and the Depositor,
not later
than March 5 of each year or if such day is not a Business Day, the
next
Business Day (with a 10 calendar day cure period, but in no event
later than
March 15), commencing in March 20 , a report on an assessment of
compliance with
the Servicing Criteria applicable to it that contains (A) a
statement by such
party of its responsibility for assessing compliance with the
Servicing Criteria
applicable to it, (B) a statement that such party used the
Servicing Criteria to
assess compliance with the Servicing Criteria applicable to it, (C)
such party's
assessment of compliance with the Servicing Criteria applicable to
it as of and
for the fiscal year covered by the Form 10-K required to be filed
pursuant to
Section 3.31, including, if there has been any material instance
of
noncompliance with the Servicing Criteria applicable to it, an
identification of
each such failure and the nature and status thereof, and (D) a
statement that a
registered public accounting firm has issued an attestation report
on such
party's assessment of compliance with the Servicing Criteria
applicable to such
party as of and for such period.
Each such assessment of compliance report shall be addressed to
the
Depositor and the Servicer and signed by an authorized officer of
the applicable
party, and shall address each of the Relevant Servicing Criteria
set forth on
Exhibit Q hereto, or as set forth in the notification furnished to
the Depositor
and the Trustee pursuant to Section 3.20(c). The Servicer and the
Trustee hereby
acknowledge and agree that their respective assessments of
compliance will cover
the items identified on Exhibit Q hereto as being covered by such
party. The
parties to this Agreement acknowledge that where a particular
Servicing
Criterion has multiple components, each party's assessment of
compliance (and
related attestation of compliance) will relate only to those
components that are
applicable to such party. Promptly after receipt of each such
report on
assessment of compliance, the Depositor shall review each such
report and, if
applicable, consult with the Servicer or the Trustee as to the
nature of any
material instance of noncompliance with the Servicing Criteria
applicable to it
(or any Servicing Function Participant engaged or utilized by the
Servicer or
the Trustee, as applicable).
(b) Each of the Servicer and the Trustee, at its own expense,
shall
cause, and shall cause any Servicing Function Participant engaged
by it, at such
party's expense, to cause, not later than March 5 of each year or
if such day is
not a Business Day, the next Business Day (with a 10 calendar day
cure period),
commencing in March 20 , a registered public accounting firm (which
may also
render other services to the Servicer, the Trustee, or such other
Servicing
Function Participants, as the case may be) and that is a member of
the American
Institute of Certified Public Accountants to furnish a report to
the Trustee and
the Depositor, to the effect that (i) it has obtained a
representation regarding
certain matters from the management of such party, which includes
an assertion
that such party has complied with the Servicing Criteria applicable
to it, and
(ii) on the basis of an examination conducted by such firm in
accordance with
standards for attestation engagements issued or adopted by the
Public Company
Accounting Oversight Board, it is expressing an opinion as to
whether such
party's assessment of compliance with the Servicing Criteria was
fairly stated
in all material respects, or it cannot express an overall opinion
regarding such
party's assessment of compliance with the Servicing Criteria. In
the event that
an overall opinion cannot be expressed, such registered public
accounting firm
shall state in such report why it was unable to express such an
opinion. Such
report must be available for general use and not contain restricted
use
language. If requested by the Depositor, such report shall contain
or be
accompanied by a consent of such accounting firm to inclusion or
incorporation
of such report in the Depositor's registration statement on Form
S-3 relating to
the Offered Certificates and the Form 10-K for the Trust.
Promptly after receipt of each such accountants' attestation
report,
the Depositor shall review the report and, if applicable, consult
with the
Servicer or the Trustee if such report (i) states that a party's
assessment of
compliance was not fairly stated in any material respect or (ii) is
unable to
state an overall opinion.
(c) No
later than 30 days following the end of each fiscal year for
the Trust for which a Form 10-K is required to be filed, (i) the
Servicer shall
forward to the Trustee the name of each Servicing Function
Participant engaged
by it and what Servicing Criteria will be addressed in the report
on assessment
of compliance prepared by such Servicing Function Participant and
(ii) the
Trustee shall forward to the Depositor the name of each Servicing
Function
Participant engaged by it and what Servicing Criteria will be
addressed in the
report on assessment of compliance prepared by such Servicing
Function
Participant, in each case to the extent of any change from the
prior year's
notice, if any.
(d) Beginning with fiscal year 20 and thereafter, none of the
Servicer, the Trustee or any Servicing Function Participant engaged
by such
parties shall be required to deliver or cause the delivery of any
such
assessments or attestation reports until April 15 unless such party
has received
written notice from the Depositor that a Form 10-K is required to
be filed in
respect of the Trust for the preceding fiscal year.
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
(a) The Servicer shall provide to the Trustee,
Certificateholders
that are federally insured savings and loan associations, the
Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of
each of the
foregoing (which, in the case of supervisory agents and examiners,
may be
required by applicable state and federal regulations) access to the
available
documentation regarding the Mortgage Loans, such access being
afforded without
charge but only upon reasonable advance request and during normal
business hours
at the offices of the Servicer designated by it.
(b) The Servicer, in its capacity as Originator and Servicer,
shall
afford the NIMS Insurer, upon reasonable advance notice, during
normal business
hours, access to all records maintained by the Servicer in respect
of its rights
and obligations hereunder and access to officers of the Servicer
responsible for
such obligations. Upon request, the Servicer shall furnish to the
NIMS Insurer
its most recent publicly available financial statements and such
other
information relating to its capacity to perform its obligations
under this
Agreement.
Section 3.22 Duties of Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager
shall
provide reports and recommendations as to loss mitigation
activities concerning
Mortgage Loans that are past due, are in default, as to which there
has been
commencement of foreclosure, as to which there has been forbearance
in exercise
of remedies, as to which any obligor is the subject of bankruptcy,
receivership,
or an arrangement of creditors, or which have become REO
Properties. Such
reports and recommendations will be based upon information provided
pursuant to
the Credit Risk Management Agreement. The Credit Risk Manager shall
look solely
to the Servicer for all information and data (including loss and
delinquency
information and data) and loan-level information and data relating
to the
servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3%
of the
aggregate Voting Rights of the Certificates. After any such
termination, the
Credit Risk Manager shall have no further obligations hereunder,
and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.23 Obligations of the Servicer in Respect of
Compensating
Interest.
Not later than the close of business on each Servicer
Remittance
Date, the Servicer shall deliver to the Trustee for deposit in the
Distribution
Account an amount ("Compensating Interest") equal to the lesser of
(A) the
aggregate of the Prepayment Interest Shortfalls on the Mortgage
Loans for the
related Distribution Date resulting from Principal Prepayments in
full on the
Mortgage Loans during the related Prepayment Period and (B) the sum
of (i) its
aggregate Servicing Fee received in the related Collection Period
and (ii) any
Prepayment Interest Excess for the related Distribution Date. The
Servicer shall
apply Compensating Interest to offset any Prepayment Interest
Shortfalls
resulting from Principal Prepayments in full on the Mortgage Loans.
The Servicer
shall not have the right to reimbursement for any amounts remitted
to the
Trustee in respect of Compensating Interest. Such amounts so
remitted shall be
included in the Available Funds and distributed therewith on the
next
Distribution Date. The Servicer shall not be obligated to pay
Compensating
Interest with respect to Prepayment Interest Shortfalls resulting
from partial
Principal Prepayments or Relief Act Interest Shortfalls.
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability
with
respect to any Mortgage Loan results from or is attributable to
adjustments to
Mortgage Interest Rates, Monthly Payments or Principal Balances
that were made
by the Servicer in a manner not consistent with the terms of the
related
Mortgage Note and this Agreement, the Servicer, upon discovery or
receipt of
notice thereof, immediately shall deliver to the Trustee for
deposit in the
Distribution Account from its own funds the amount of any such
shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the
Depositor and
any successor servicer in respect of any such liability. Such
indemnities shall
survive the termination or discharge of this Agreement.
Notwithstanding the
foregoing, this Section 3.24 shall not limit the ability of the
Servicer to seek
recovery of any such amounts from the related Mortgagor under the
terms of the
related Mortgage Note, as permitted by law.
Section 3.25 Investment of Funds in the Collection Account and
the
Distribution Account.
(a) The
Servicer may direct any depository institution maintaining
the Collection Account and the Trustee may direct any depository
institution
maintaining the Distribution Account (for purposes of this Section
3.25, each an
"Investment Account"), to invest the funds in such Investment
Account in one or
more Eligible Investments bearing interest or sold at a discount,
and maturing,
unless payable on demand, (i) no later than the Business Day
immediately
preceding the date on which such funds are required to be withdrawn
from such
account pursuant to this Agreement, if a Person other than the
Trustee is the
obligor thereon, and (ii) no later than the date on which such
funds are
required to be withdrawn from such account pursuant to this
Agreement, if the
Trustee is the obligor thereon or if such investment is managed or
advised by
the Trustee or an Affiliate of the Trustee. All such Eligible
Investments shall
be held to maturity, unless payable on demand. Any investment of
funds in an
Investment Account shall be made in the name of the Trustee or the
Servicer, as
applicable (in its capacity as such) or in the name of a nominee of
the Trustee.
The Trustee shall be entitled to sole possession (except with
respect to
investment direction of funds held in the Collection Account) over
each such
investment and the income thereon, and any certificate or other
instrument
evidencing any such investment shall be delivered directly to the
Trustee or its
agent, together with any document of transfer necessary to transfer
title to
such investment to the Trustee or its nominee. In the event amounts
on deposit
in an Investment Account are at any time invested in an Eligible
Investment
payable on demand, the Trustee shall at the direction of the
Servicer:
(x) consistent
with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Eligible Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand
payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Eligible Investment would not
constitute an Eligible Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds in
the
Collection Account shall be for the benefit of the Servicer. The
Servicer shall
deposit in the Collection Account or (to the extent funds in the
Escrow Account
are invested if permitted by applicable law) the Escrow Account, as
applicable,
from its own funds the amount of any loss incurred in respect of
any such
Eligible Investment made with funds in such account immediately
upon realization
of such loss. All income and gain realized from the investment of
funds in the
Distribution Account shall be for the benefit of the Trustee. The
Trustee shall
deposit in the Distribution Account from its own funds the amount
of any loss
incurred on Eligible Investments in the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement, if
any
default occurs in the making of a payment due under any Eligible
Investment, or
if a default occurs in any other performance required under any
Eligible
Investment, the Trustee may and, subject to Section 8.01 and
Section 8.02(a)(v),
upon the request of the NIMS Insurer or Holders of Certificates
representing
more than 50% of the Voting Rights allocated to any Class of
Certificates, shall
take such action as may be appropriate to enforce such payment or
performance,
including the institution and prosecution of appropriate
proceedings.
The Trustee shall not in any way be held liable by reason of
any
insufficiency in any Account held by the Trustee resulting from any
investment
loss on any Eligible Investment included therein (except to the
extent that the
Trustee is the obligor and has defaulted thereon).
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the Trustee if it is required to succeed the Servicer
hereunder)
indemnifies and holds the Trustee, the Depositor, the NIMS Insurer
and the Trust
Fund harmless against any and all third party claims, losses,
penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments,
and any other
costs, fees and expenses that the Trustee, the Depositor, the NIMS
Insurer and
the Trust Fund may sustain in any way related to the failure of the
Servicer to
perform its duties and service the Mortgage Loans in compliance
with the
Servicing Standard. The Servicer shall immediately notify the
Trustee, the NIMS
Insurer and the Depositor if a claim is made that may result in
such claims,
losses, penalties, fines, forfeitures, legal fees or related costs,
judgments,
or any other costs, fees and expenses, and the Servicer shall
assume (with the
consent of the Trustee) the defense of any such claim and pay all
expenses in
connection therewith, including reasonable counsel fees, and
promptly pay,
discharge and satisfy any judgment or decree which may be entered
against the
Servicer, the Trustee, the Depositor, the NIMS Insurer and/or the
Trust Fund in
respect of such claim. The provisions of this Section 3.26 shall
survive the
termination of this Agreement and the payment of the outstanding
Certificates.
(b) None of the Depositor, the NIMS Insurer, the Servicer, or any
of
the directors, officers, employees or agents of the Depositor or
the Servicer
shall be under any liability to the Trust Fund or the
Certificateholders for any
action taken, or for refraining from the taking of any action, in
good faith
pursuant to this Agreement, or for errors in judgment; provided,
however, that
this provision shall not protect the Depositors, the NIMS Insurer
or the
Servicer or any such Person against any breach of warranties or
representations
made by such party herein, or against any specific liability
imposed on the
Servicer for a breach of the Servicing Standard and/or this
Agreement, or
against any liability which would otherwise be imposed by reason of
its
respective willful misfeasance, bad faith, fraud or negligence in
the
performance of its duties or by reasons of negligent disregard of
its respective
obligations or duties hereunder.
The Depositor, the NIMS Insurer, the Servicer and any director,
officer, employee or agent of the Depositor, the NIMS Insurer or
the Servicer,
may rely in good faith on any document of any kind which, prima
facie, is
properly executed and submitted by any appropriate Person with
respect to any
matters arising hereunder. The Depositor, the Servicer, the NIMS
Insurer and any
director, officer, employee or agent of the Depositor, the Servicer
or the NIMS
Insurer shall be indemnified and held harmless by the Trust against
any loss,
liability or expense incurred in connection with any legal action
relating to
this Agreement or the Certificates, other than any loss, liability
or expense
incurred in connection with any legal action incurred by reason of
its
respective misfeasance, bad faith, fraud or negligence, a breach of
a
representation or warranty made by such party hereunder or (in the
case of the
Servicer) a breach of the Servicing Standard in the performance of
its
respective duties or by reason of negligent disregard of its
respective
obligations or duties hereunder. Neither the Depositor, the NIMS
Insurer, nor
the Servicer shall be under any obligation to appear in, prosecute
or defend any
legal action unless such action is related to its respective duties
under this
Agreement and in its opinion does not expose it to any expense or
liability;
provided, however, that the Depositor, the NIMS Insurer or the
Servicer may in
their discretion undertake any action related to their obligations
hereunder
which they may deem necessary or desirable with respect to this
Agreement and
the rights and duties of the parties hereto and the interests of
the
Certificateholders hereunder. The Servicer's right to indemnity or
reimbursement
pursuant to this Section shall survive any resignation or
termination of the
Servicer pursuant to Section 6.04 or 7.01 with respect to any
losses, expenses,
costs or liabilities arising prior to such resignation or
termination (or
arising from events that occurred prior to such resignation or
termination).
Section 3.27 Reports of Foreclosure and Abandonment of
Mortgaged
Properties.
Beginning in 20 , the Servicer shall file the reports of
foreclosure
and abandonment of any Mortgaged Property required by Section 6050J
of the Code
with the Internal Revenue Service on or before the due date for any
such report.
Not later than 90 days following the end of each calendar year,
beginning in 20
, the Servicer will deliver an Officer's Certificate to the Trustee
and the NIMS
Insurer certifying its compliance with this Section 3.27. The
reports from the
Servicer shall be in form and substance sufficient to meet the
reporting
requirements imposed by such Section 6050J.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this
Agreement, the
Trust is not authorized and has no power to:
(1)
borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell
assets; or
(3) engage in any business or activities.
(b) Each party to this
Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust
Fund or
initiate any other form of insolvency proceeding until after the
Certificates
have been paid.
Section 3.29 Limitation of Liability of the Credit Risk
Manager.
Neither the Credit
Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any
liability to
the Depositor, the Servicer, the Trustee or the Certificateholders
for any
action taken or for refraining from the taking of any action in
good faith
pursuant to this Agreement, in reliance upon information provided
by the
Servicer under the Credit Risk Management Agreement or for errors
in judgment;
provided, however, that this provision shall not protect the Credit
Risk Manager
or any such person against liability that would otherwise be
imposed by reason
of willful malfeasance, bad faith or negligence in its performance
of its duties
or by reason of reckless disregard for its obligations and duties
under this
Agreement or the applicable Credit Risk Management Agreement. The
Credit Risk
Manager and any director, officer, employee or agent of the Credit
Risk Manager
may rely in good faith on any document of any kind prima facie
properly executed
and submitted by any Person respecting any matters arising
hereunder, and may
rely in good faith upon the accuracy of information furnished by
the Servicer
pursuant to the applicable Credit Risk Management Agreement in the
performance
of its duties thereunder and hereunder.
Section 3.30 No Personal Solicitation.
From and after the Closing Date, the Servicer agrees that it
will
not take any action or permit or cause any action to be taken by
any of its
agents and Affiliates, or by any independent contractors or
independent mortgage
brokerage companies on the Servicer's behalf, to personally, by
telephone, mail
or electronic mail, solicit the Mortgagor under any Mortgage Loan
for the
purpose of refinancing such Mortgage Loan; provided, that the
Servicer may
solicit any Mortgagor for whom the Servicer has received a request
for
verification of mortgage, a request for demand for payoff, a
mortgagor initiated
written or verbal communication indicating a desire to prepay the
related
Mortgage Loan, or the mortgagor initiates a title search; provided
further, it
is understood and agreed that promotions undertaken by the Servicer
or any of
its Affiliates which (i) concern optional insurance products or
other additional
products or (ii) are directed to the general public at large,
including, without
limitation, mass mailings based on commercially acquired mailing
lists,
newspaper, radio and television advertisements shall not constitute
solicitation
under this Section, nor is the Servicer prohibited from responding
to
unsolicited requests or inquiries made by a Mortgagor or an agent
of a
Mortgagor. Furthermore, the Servicer shall be permitted to include
in its
monthly statements to borrowers or otherwise, statements regarding
the
availability of the Servicer's counseling services with respect to
refinancing
mortgage loans.
Section 3.31 Periodic Filings.
(a) The Trustee and the Servicer shall reasonably cooperate with
the
Depositor to enable the Depositor to satisfy its reporting
requirements under
the Exchange Act and the parties hereto shall reasonably cooperate
to enable the
Commission's requirements with respect to the Depositor to be met
in the event
that the Commission issues additional interpretive guidelines or
promulgates
rules or regulations, or in the event of any other change of law
that would
require reporting arrangements or the allocation of
responsibilities with
respect thereto, as described in this Section 3.31, to be conducted
or allocated
in a different manner. Without limiting the generality of the
foregoing, the
Trustee shall prepare on behalf of the Depositor any Current
Reports on Form 8-K
(each, a "Form 8-K"), Distribution Reports on Form 10-D (each, a
"Form 10-D")
and Annual Reports on Form 10-K (each, a "Form 10-K") as required
by the
Exchange Act and the rules and regulations of the Commission
thereunder, the
Depositor shall sign and the Trustee shall file (via the
Commission's Electronic
Data Gathering and Retrieval System) such forms on behalf of the
Depositor.
Notwithstanding the foregoing, the Depositor shall file the Form
8-Ks in
connection with the issuance of the Certificates.
(b) Each Form 10-D shall be filed by the Trustee within 15 days
after each Distribution Date and shall include a copy of the
Distribution Date
Statement for such Distribution Date as an exhibit thereto. In
addition, the
Trustee shall include under Item 1 of each Form 10-D any
information required by
Item 1121 of Regulation AB to the extent relevant that is not
included on the
Distribution Date Statement. Any information in addition to the
Distribution
Date Statement and any other information required by Item 1121 of
Regulation AB
("Additional Form 10-D Information") shall be determined by the
party preparing
such information as set forth on Exhibit R-1 hereto and the Trustee
shall
compile such information pursuant to the following paragraph. The
Trustee will
have no duty or liability for any failure hereunder to determine or
prepare any
Additional Form 10-D Information, except as set forth in the
Section 3.31(b).
As set forth on Exhibit R-1 hereto, within five (5) calendar
days
after the related Distribution Date, certain parties hereto shall
be required to
provide to the Trustee and the Depositor, to the extent known by
such parties,
any Additional Form 10-D Information, if applicable. The Depositor
will be
responsible for all reasonable fees and expenses assessed or
incurred by the
Trustee in connection with including any Additional Form 10-D
Information on
Form 10-D pursuant to this paragraph, including converting any such
disclosure
to an EDGAR-compatible format, other than such Additional Form 10-D
Information
for which the Trustee is responsible as set forth on Exhibit R-1
hereto.
After preparing the Form 10-D, the Trustee shall forward
electronically a draft copy of the Form 10-D to the Depositor for
review. No
later than two (2) Business Days prior to the 15th calendar day
after the
related Distribution Date, an officer of the Depositor shall
indicate to the
Trustee the Depositor's consent to the form and substance of the
draft Form 10-D
(which consent may be in electronic form). If a Form 10-D cannot be
filed on
time or if a previously filed Form 10-D needs to be amended, the
Trustee will
follow the procedures set forth in Section 3.31(e). Promptly (but
no later than
one Business Day) after filing with the Commission, the Trustee
will make
available on its internet website a final executed copy of each
Form 10-D. The
Trustee shall have no liability for any loss, expense, damage or
claim arising
out of or with respect to any failure to properly prepare and/or
timely file
such Form 10-D, where such failure results from the Trustee's
inability or
failure to obtain or receive, on a timely basis, any information
from any party
hereto (other than the Trustee or any Servicing Function
Participant utilized by
the Trustee) needed to prepare, arrange for execution or file such
Form 10-D,
not resulting from its own negligence, bad faith or willful
misconduct.
(c) On or before 90 days after the end of each fiscal year of
the
Trust (or such earlier date as may be required by the Exchange Act
and the rules
and regulations of the Commission) commencing in 20 , the Trustee
shall file a
Form 10-K, in form and substance as required by applicable law or
applicable
Commission staff interpretations. Each such Form 10-K shall include
the
following items, in each case to the extent they have been
delivered to the
Trustee within the applicable time frames set forth in this
Agreement: (i) an
annual compliance statement for the Trustee, the Servicer and each
Additional
Servicer, as described under Section 3.19, (ii)(A) the annual
reports on
assessment of compliance with Servicing Criteria for the Servicer,
the Trustee
and each Servicing Function Participant, as described under Section
3.20, and
(B) if the Servicer's, the Trustee's or each Servicing Function
Participant's
report on assessment of compliance with Servicing Criteria
described under
Section 3.20 identifies any material instance of noncompliance or
is not
included, disclosure identifying such instance of noncompliance or
disclosure
that such report is not included and an explanation thereof, as the
case may be,
(iii)(A) the registered public accounting firm attestation report
for the
Servicer, the Trustee and each Servicing Function Participant, as
described
under Section 3.20, and (B) if any registered public accounting
firm attestation
report described under Section 3.20 identifies any material
instance of
noncompliance or is not included, disclosure identifying such
instance of
noncompliance or disclosure that such report is not included and an
explanation
thereof, as the case may be, and (iv) a Certification as described
in this
Section 3.31(c). Any disclosure or information in addition to (i)
through (iv)
above that is required to be included on Form 10-K ("Additional
Form 10-K
Information") shall be prepared by the party responsible for
preparing such
information as set forth on Exhibit S hereto and the Trustee shall
compile such
information pursuant to the following paragraph. The Trustee will
have no duty
or liability for any failure hereunder to determine or prepare any
Additional
Form 10-K Information, except to the extent of its obligations as
set forth in
the next paragraph.
As set forth on Exhibit R-2 hereto, no later than March 5th of
each
year that the Trust is subject to the Exchange Act reporting
requirements,
commencing in 20 , certain parties to this Agreement shall be
required to
provide to the Trustee and the Depositor, to the extent known by
such applicable
parties, any Additional Form 10-K Information. The Depositor will
be responsible
for all reasonable fees and expenses assessed or incurred by the
Trustee in
connection with including any Additional Form 10-D Information on
Form 10-D
pursuant to this paragraph, including converting any such
disclosure to an
EDGAR-compatible format, other than such Additional Form 10-D
Information for
which the Trustee is responsible as set forth on Exhibit R-2
hereto.
After preparing the Form 10-K, the Trustee shall forward
electronically a draft copy of the Form 10-K to the Depositor for
review. No
later than the close of business on the second Business Day prior
to the 10-K
Filing Deadline, the Depositor shall sign the Form 10-K and return
an electronic
or fax copy of such signed Form 10-K, together with a signed copy
of the
certification (the "Certification") attached hereto as Exhibit O
and required to
be included with each Form 10-K pursuant to the Sarbanes-Oxley Act
of 2002, as
amended (with an original executed hard copy of each to follow by
overnight
mail) to the Trustee. If a Form 10-K cannot be filed on time or if
a previously
filed Form 10-K needs to be amended, the Trustee will follow the
procedures set
forth in Section 3.31(e). Promptly (but no later than one Business
Day) after
filing with the Commission, the Trustee will make available on its
internet
website a final executed copy of each Form 10-K. The Depositor and
the Servicer
acknowledge that the performance by the Trustee of its duties under
this Section
3.31(c) relating to the timely preparation and filing of Form 10-K
is contingent
upon the Servicer, the Depositor, any Additional Servicer or
Servicing Function
Participant and any other Person obligated to provide Additional
Form 10-K
Information as set forth on Exhibit R-2 hereto, observing all
applicable
deadlines in the performance of their duties under this Section
3.31(c), Section
3.19 and Section 3.20. The Trustee shall have no liability for any
loss,
expense, damage, claim arising out of or with respect to any
failure to properly
prepare and/or timely file such Form 10-K, where such failure
results from the
Trustee's inability or failure to obtain or receive, on a timely
basis, any
information from any party hereto (other than the Trustee or any
Servicing
Function Participant utilized by the Trustee) needed to prepare,
arrange for
execution or file such Form 10-K, not resulting from its own
negligence, bad
faith or willful misconduct.
In connection with the execution of the Certification, the
Trustee
shall sign a certification (in the form attached hereto as Exhibit
P-1, with
such changes as may be necessary or appropriate as a result of
changes
promulgated by the Commission) for the benefit of the Depositor and
its
officers, directors and Affiliates, and the Servicer shall sign a
certification
(in the form attached hereto as Exhibit P-2, with such changes as
may be
necessary or appropriate as a result of changes promulgated by the
Commission)
for the benefit of the Depositor and its officers, directors and
Affiliates.
Each such certification shall be delivered to the Depositor no
later than March
5th of each year (or if such day is not a Business Day, the
immediately
preceding Business Day). In the event that prior to the filing date
of the Form
10-K in March of each year, the Trustee or the Servicer has actual
knowledge of
information material to the Certification, that party shall
promptly notify the
Depositor and each of the other parties signing the certifications
referenced in
the preceding sentence. In addition, (i) the Trustee shall
indemnify and hold
harmless the Depositor and the Sponsor and their officers,
directors, employees,
agents and Affiliates from and against any losses, damages,
penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments
and other costs and expenses arising out of or based upon any
breach of the
Trustee's obligations under Section 3.19, Section 3.20, Section
3.31 and Section
8.01 or the Trustee's material misstatement or omission,
negligence, bad faith
or willful misconduct in connection therewith, and (ii) the
Servicer shall
indemnify and hold harmless the Depositor and the Sponsor and their
respective
officers, directors, employees, agents and Affiliates from and
against any
losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal
fees and related costs, judgments and other costs and expenses
arising out of or
based upon any breach of the Servicer's obligations under Section
3.19, Section
3.20 and Section 3.31 or any material misstatement or omission,
negligence, bad
faith or willful misconduct in connection therewith. If the
indemnification
provided for herein is unavailable or insufficient to hold harmless
any
indemnified party, then (i) the Trustee agrees in connection with a
breach of
the Trustee's obligations under Section 3.19, Section 3.20, Section
3.31 and
Section 8.01 or the Trustee's material misstatement, omission,
negligence, bad
faith or willful misconduct in connection therewith that it shall
contribute to
the amount paid or payable by the Depositor and the Sponsor as a
result of the
losses, claims, damages or liabilities of the Depositor and the
Sponsor in such
proportion as is appropriate to reflect the relative fault of the
Depositor and
the Sponsor on the one hand and the Trustee on the other and (ii)
the Servicer
agrees in connection with a breach of the Servicer's obligations
under Section
3.19, Section 3.20 and Section 3.31 or the Servicer's material
misstatement,
omission, negligence, bad faith or willful misconduct in connection
therewith
that it shall contribute to the amount paid or payable by the
Depositor and the
Sponsor as a result of the losses, claims, damages or liabilities
of the
Depositor and the Sponsor in such proportion as is appropriate to
reflect the
relative fault of the Depositor and the Sponsor on the one hand and
the Servicer
on the other.
(d) Within four (4) Business Days after the occurrence of an
event
requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and
also if requested by the Depositor, the Trustee shall prepare and
file on behalf
of the Trust any Form 8-K, as required by the Exchange Act,
provided that the
Depositor shall file the initial Form 8-Ks in connection with the
issuance of
the Certificates. Any disclosure or information related to a
Reportable Event or
that is otherwise required to be included on Form 8-K (such
information, "Form
8-K Information") shall be reported to the Depositor and the
Trustee by the
parties set forth on Exhibit R-3 hereto and compiled by the Trustee
pursuant to
the following paragraph. The Trustee will have no duty or liability
for any
failure hereunder to determine or prepare any Form 8-K Information
or any Form
8-K, except to the extent of its obligations as set forth in the
next paragraph.
As set forth on Exhibit R-3 hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than
12:00 noon on
the second Business Day after the occurrence of a Reportable Event
certain
parties to this Agreement shall be required to provide to the
Depositor and the
Trustee, to the extent known by such applicable parties, any Form
8-K
Information, if applicable. The Depositor will be responsible for
all reasonable
fees and expenses assessed or incurred by the Trustee in connection
with
including any Form 8-K Information on Form 8-K pursuant to this
paragraph,
including converting any such disclosure to an EDGAR-compatible
format, other
than such Form 8-K Information for which the Trustee is responsible
as set forth
on Exhibit R-3 hereto.
After preparing the Form 8-K, the Trustee shall forward
electronically a draft copy of the Form 8-K to the Depositor for
review,
verification and execution by the Depositor. No later than 12:00
noon on the
fourth Business Day after the Reportable Event, an officer of the
Depositor
shall sign the Form 8-K and return an electronic or fax copy of
such signed Form
8-K (with an original executed hard copy to follow by overnight
mail) to the
Trustee. Promptly (but no later than one Business Day) after filing
with the
Commission, the Trustee will, make available on its internet
website a final
executed copy of each Form 8-K filed by it. If a Form 8-K cannot be
filed on
time or if a previously filed Form 8-K needs to be amended, the
Trustee will
follow the procedures set forth in Section 3.31(e). The Depositor
acknowledges
that the performance by the Trustee of its duties under this
Section 3.31(d)
related to the timely preparation and filing of Form 8-K is
contingent upon the
parties to this Agreement and any other Person obligated to provide
Form 8-K
Information as set forth on Exhibit R-3 hereto, observing all
applicable
deadlines in the performance of their duties under this Section
3.31(d). The
Trustee shall have no liability for any loss, expense, damage or
claim arising
out of or with respect to any failure to properly prepare and/or
timely file
such Form 8-K, where such failure results from the Trustee's
inability or
failure to obtain or receive, on a timely basis, any information
from any party
hereto (other than the Trustee or any Servicing Function
Participant utilized by
the Trustee) needed to prepare, arrange for execution or file such
Form 8-K, not
resulting from its own negligence, bad faith or willful
misconduct.
(e) In the event that the Trustee is unable to timely file with
the
Commission all or any required portion of any Form 8-K, Form 10-D
or Form 10-K
required to be filed by this Agreement because required information
was either
not delivered to it or delivered to it after the delivery deadlines
set forth in
this Agreement or for any other reason, the Trustee will
immediately notify the
Depositor by telephone. In the case of Form 10-D and Form 10-K, the
Depositor,
Servicer and Trustee will cooperate to prepare and file a Form
12b-25 pursuant
to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the
Trustee will,
upon receipt of all information required to be included on Form
8-K, file such
Form 8-K. Within 5 calendar days following the original due date of
the Form
10-D, the Trustee shall prepare and file the related Form 10-D.
Within 15
calendar days following the original due date of the Form 10-K, the
Trustee
shall prepare and file the related Form 10-K. In the event that any
previously
filed Form 8-K, Form 10-D or Form 10-K needs to be amended, the
party to this
Agreement deciding that an amendment to such Form 8-K, Form 10-D or
Form 10-K is
required will notify the Depositor, the Trustee and the Servicer
and such
parties will cooperate to prepare any necessary Form 8-K/A, Form
10-D/A or Form
10-K/A. Any Form 12b-25 or any amendment to Form 8-K, Form 10-D or
Form 10-K
shall be signed by the Depositor. The Depositor and Servicer
acknowledge that
the performance by the Trustee of its duties under this Section
3.31(e) related
to the timely preparation and filing of a Form 12b-25 or any
amendment to Form
8-K, Form 10-D or Form 10-K is contingent upon the Servicer and the
Depositor
performing their duties under this Section. The Trustee shall have
no liability
for any loss, expense, damage, claim arising out of or with respect
to any
failure to properly prepare and/or timely file any such Form 12b-25
or any
amendments to Form 8-K, Form 10-D or Form 10-K, where such failure
results from
the Trustee's inability or failure to obtain or receive, on a
timely basis, any
information from any other party hereto (other than the Trustee or
any Servicing
Function Participant utilized by the Trustee) needed to prepare,
arrange for
execution or file such Form 12b-25 or any amendments to Form 8-K,
Form 10-D or
Form 10-K, not resulting from its own negligence, bad faith or
willful
misconduct.
(f) Upon any filing with the Commission, the Trustee shall
promptly
deliver to the Depo
